By Todd Rosenbluth, CFRA
BlackRock and Vanguard have been dominating the ETF market over the last five years aided by their low-cost asset allocation products, according to the last CFRA Research review of ETF daily flows. Of the top 20 ETFs, as of the end of August 2019 that dominated asset growth, 18 are from the top two providers.
CFRA compared the top-20 ETF products at the end of 2014 with the more recent leading products and found there were notable changes.
For example, at the end of 2014, Vanguard 500 Index (VOO) was a $28 billion ETF was the 10th largest product. But fast forward to the end of August 2019, the lowest cost S&P 500 Index based ETF jumped to the third largest at $119 billion.
Vanguard gained market share from the more expensive SPDR S&P 500 (SPY), which remained the largest ETF, but grew to only $262 billion, from $216 billion, despite strong appreciation for the stocks inside the benchmark. iShares Core S&P 500 (IVV) also experienced rapid growth according to CFRA in the nearly five-year period, with its assets more than doubling to $182 billion.
Another example was with iShares international equity products. iShares Core MSCI EAFE (IEFA) and iShares Core MSCI Emerging Markets (IEMG) catapulted into the top-20 at the end of August with $63 billion and $53 billion, respectively. These funds are cheaper alternatives to iShares MSCI EAFE (EFA) and iShares MSCI Emerging Markets (EEM) and investors gravitated toward IEFA and IEMG, despite significant similar ETF constituent holdings.
At the end of 2014, EFA was the third largest ETF with $53 billion in assets, but ended August 2019 at just $58 billion, making it the 10th biggest fund. EEM suffered an even greater fall in the league table as it moved from the seventh largest to outside of the top-20. Meanwhile emerging markets peer, Vanguard FTSE Emerging Markets (VWO) dropped only to the ninth spot, from the fifth spot.
Here are the current top 20 ETFs by AUM (as of Sept. 27, 2019):
1. SPDR S&P 500 ETF (SPY) – $275 billion
2. iShares Core S&P 500 ETF (IVV) – $186 billion
3. Vanguard Total Stock Market ETF (VTI) – $122 billion
4. Vanguard S&P 500 ETF (VOO) – $121 billion
5. Invesco QQQ ETF (QQQ) – $75 billion
6. Vanguard FTSE Develped Markets ETF (VEA) – $72 billion
7. iShares Core U.S. Aggregate Bond ETF (AGG) – $65 billion
8. iShares Core MSCI EAFE ETF (IEFA) – $65 billion
9. Vanguard FTSE Emerging Markets ETF (VWO) – $61 billion
10. iShares MSCI EAFE ETF (EFA) – $59 billion
11. iShares Core MSCI Emerging Markets ETF (IEMG) – $54 billion
12. Vanguard Value ETF (VTV) – $49 billion
13. iShares Core S&P 500 Mid-Cap ETF (IJH) – $49 billion
14. Vanguard Total Bond Market ETF (BND) – $45 billion
15. iShares Russell 1000 Growth ETF (IWF) – $45 billion
16. SPDR Gold Trust (GLD) – $44 billion
17. iShares Russell 2000 ETF (IWM) – $44 billion
18. iShares Core S&P 500 Small-Cap ETF (IJR) – $44 billion
19. Vanguard Growth ETF (VUG) – $41 billion
20. iShares Russell 1000 Value ETF (IWD) – $39 billion
Todd Rosenbluth is Director of ETF & Mutual Fund Research at CFRA.