Like the U.S. market, the European ETF marketplace is dominated by three providers – BlackRock’s (NYSE: BLK) iShares, Deutsche Bank (NYSE: DB) and Lyxor. As the FT notes, even State Street’s (NYSE: STT) State Street Global Advisors and Vanguard, the second- and third-largest U.S. ETF sponsors, currently have tiny slices of the European ETF market.
In Europe, Deutsche Bank and Lyxor primarily offer derivatives-based products, also known as synthetic ETFs. Europe’s UCITS fund rules allow for easy issuance of such products.
Earlier this year, former iShares CEO Lee Kranefuss said increased ETF competition in Europe could bolster inflows.
BlackRock’s iShares ETFs make up almost half of the assets held in European-listed ETFs, up from under a third at the end of 2010. That dominance has prompted calls, even from BlackRock, for more ETF competition in Europe. [Is Competition in Europe’s ETF Market Stifled?]
ETF Trends editorial team contributed to this post.