State Street (STT) was the second-largest ETF provider at the end of the first quarter but Vanguard Group is coming on strong to challenge the Boston-based firm.
At the end of March, State Street had $345 billion of ETF assets, or 23.5% market share. Vanguard’s ETF assets totaled $277 billion for an 18.9% market share, according to Morningstar. BlackRock’s iShares family controlled $598 billion, or 40.8% of the U.S. ETF industry, which is highly concentrated in the so-called Big Three.
Recent ETF flow trends at State Street don’t look too promising compared with its two main rivals. For example, State Street was the only one of the Big Three to experience net ETF outflows in the first quarter, losing $6.4 billion, according to Morningstar. Meanwhile, iShares gathered $17.6 billion during the first three months of the year, while Vanguard added $19.7 billion.
“State Street has lost 1.2 percentage points of market share over the past year,” said Morningstar analyst Michael Rawson in a first-quarter wrap of ETF flows. “Combined, iShares, State Street, and Vanguard hold 83% of ETF assets under management.”
Year to date through April 15, State Street’s gold ETF, GLD, has seen net outflows of $9.9 billion, according to IndexUniverse data. SPY, the S&P 500 ETF, has lost $3.3 billion. The two funds top the ETF list of largest outflows so far this year.
Gold’s price weakness combined with redemptions have shrunk GLD this year. The gold ETF ended 2012 with total assets of $72.3 billion. It now stands at $51.2 billion. [Gold ETF Falls 9% on Record Trading Volume]
In fact, Vanguard FTSE Emerging Markets (VWO) has surpassed GLD as the second-largest ETF listed in the U.S.
The S&P 500-tracking SPY remains the largest ETF by far with $134.1 billion of assets. It is also the largest U.S. ETF, launched in 1993.
SPY’s rivals indexed to the S&P 500 have seen net inflows in 2013. Vanguard S&P 500 (VOO) and iShares Core S&P 500 (IVV) have gathered $1.6 billion and $2.3 billion, respectively, according to IndexUniverse. [Comparing Three S&P 500 ETFs]
None of the top 10 best-selling ETFs so far this year is managed by State Street.
SPDR Gold Shares
Full disclosure: Tom Lydon’s clients own GLD and SPY.
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.