Although there has been ample talk of the tussle between State Street’s (NYSE: STT) State Street Global Advisors unit and Vanguard to be the second-largest U.S. ETF sponsor, a spot for now retained by SSgA, proper treatment of that battle cannot ignore some advantages held by SSgA.

Analyzing flows into and out of SSgA ETF shows the SPDR S&P 500 ETF (NYSEArca: SPY) and the SPDR Gold Shares (NYSEArca: GLD) still loom large for the issuer. However, that does not mean the positive impact of the firm’s dominant perch in the booming market for sector and industry ETFs should go unnoticed. Certainly not in a year in which sector ETFs hauled in $37.7 billion in the first half of 2014, nearly triple the $13.6 billion allocated to broad market equity funds. [Sector ETFs Swell in Size]

“Our prominence in the sector and industry ETF market doesn’t go unnoticed when talking with clients,” said SSgA Vice President and head of research Dave Mazza in an interview with ETF Trends from the Morningstar ETF Conference in Chicago.

Part of the reason sector and industry funds have become a growth market for ETF issuers is the increasing number of investors, including asset management firms and strategists, that are foregoing stock-picking in favor of tactical sector bets. [Tactical Trend Following With ETFs]

“Investors are looking at the U.S. market differently and using sector rotation strategies,” added Mazza. “Sector ETFs are in between core and active strategies.”

Flows data show SSgA is benefiting from the flight to sector ETFs. With 2014 inflows of almost $2.3 billion, the Energy Select Sector SPDR (NYSEArca: XLE) is the only sector ETF to rank among the top-10 asset-gathering ETFs this year. In the second quarter, XLE was joined in the top-10 by the Utilities Select Sector SPDR (NYSEArca: XLU) and the Industrial Select Sector SPDR (NYSEArca: XLI).

In the current quarter, the Consumer Discretionary Select Sector SPDR (NYSEArca: XLY) is the only sector fund to rank among the top-10 ETFs for new assets added. Looking at sector ETF flows reveals something else: The preference by professional investors for SSgA’s SPDR series, a preference driven the tight spreads and robust liquidity across ETFs such as XLE and XLI.

In the third quarter, the Health Care Select Sector SPDR (NYSEArca: XLV) has added $440.2 million in new assets, more than double the amount investors have added to the Vanguard Health Care ETF (NYSEArca: VHT). The Technology Select Sector SPDR (NYSEArca: XLK) has added nearly $682 million in new assets since July 1, more than five times the amount that has flowed into the Vanguard Information Technology ETF (NYSEArca: VGT). [Sector SPDRs Still Flourishing]

Increasing tactical usage of ETFs has also put a spotlight on SSgA’s industry offerings, including well-known ETFs such as the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP) and the SPDR S&P Biotech ETF (NYSEArca: XBI).

“Industry funds are much more nuanced and much more granular,” said Mazza while noting there are significant differences between the various industry ETFs of competing issuers.