Institutional ETF Ownership Steadily on the Rise

The ETF universe has quickly expanded in recent years, with institutional investors playing a vital role in the sudden growth spurt.

In a recent report, titled Who Uses ETFs & Why: The DB Institutional ETF Ownership Guide, Deutsche Bank researchers, led by Chin Okoro, looked at ETF ownership among major institutional groups within the U.S. as reported by institutional investors through the 13F filing process and found ownership of ETFs totaled $2 trillion among 3,431 institutional investors  as of the end of 2017.

The institutional ownership of ETFs was broken down in a concentrated $1.6 trillion in equity ETFs, followed by $353 billion in fixed-income ETFs and  $40 billion in commodity ETFs.

Year-over-year, ETF assets under management held by institutional investors in 2017 surged 39% to $557 billion, marking the largest year-over-year change in ETF ownership in the last five years.

Equity ETF ownership made up a large portion of the new inflows over 2017, representing 84% of incremental assets or $467 billion of the $557 billion.

Institutional ETF Investment Filings

Looking at the institutional ETF investment filings, the Deutsche Bank researchers also found a number trends that were popping up across the ETF industry. For instance, brokers were very active in ETF ecosystem despite their lower ownership levels. A significant ETF amount of assets are now held by a small number of institutions. Hedge Funds also used ETFs in record numbers in 2017.