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A Visual Guide to the ETF Industry

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Five charts reveal some interesting trends among ETF investors.

Since its birth in 1993, the ETF industry has grown to encompass hundreds of investment strategies and nearly $2 trillion in assets. While the product lineup has become quite diversified in many ways, several major concentrations still exist. 

Below are five charts illustrating various trends in the ETF industry.

New ETFs

More than 200 products debuted during the first three quarters of 2015, bringing the total to nearly 1,800. But older funds continue to dominate the asset count; the following chart shows the ETF industry by assets, with funds launched after 2010 highlighted in yellow:

These ETFs represent about 48 percent of the products, but just 10 percent of assets.

Of the approximately 850 funds launched after 2010, 39 had reached $1 billion in assets at the end of the third quarter. The largest of these are:

  • Deutsche X-trackers MSCI EAFE Hedged Equity ETF (DBEF)
  • iShares Core MSCI Emerging Markets ETF (IEMG)
  • iShares Core MSCI EAFE ETF (IEFA)
  • iShares MSCI USA Minimum Volatility ETF (USMV)
  • PowerShares Senior Loan ETF ETF (BKLN)

Big Three Issuers

The frequency of iShares funds in the list above is no coincidence; that company is one of the largest ETF issuers, along with Vanguard and State Street. The following chart shows the ETF industry by assets, with funds not belonging to those three issuers highlighted in yellow:

The three largest issuers are responsible for about 30 percent of the products, but hold about 80 percent of all ETF assets. The largest ETFs from other issuers include:

Low Cost ETFs

Though ETFs are associated with low cost indexing strategies, a significant portion of assets is now in funds that could be considered expensive. The following chart shows the ETF industry by assets, with expense ratios higher than 30 basis points highlighted in yellow:

Approximately 78 percent of ETFs charge more than 30 basis points in annual fees, though they combine for only about 33 percent of the total assets.

Active ETFs

While active ETF assets have grown in recent years — there are now four products (MINT, BOND, NEAR, TOTL) with more than $1 billion — index-based products still account for the lion’s share. The following chart shows the ETF industry by assets, with actively-managed funds highlighted in yellow:

Active ETFs represent about 1 percent of total assets.

Stock and Bond ETFs

Though alternatives have been a hot topic recently, investors continue to use ETFs primarily for exposure to stocks and bonds. The following chart shows the ETF industry by assets, with funds targeting asset classes besides stocks and bonds highlighted in yellow:

There are nearly 500 ETFs highlighted above, but they represent only 5 percent of total assets, and GLD is about a quarter of that total. (This total includes leveraged stock and leveraged bond ETFs.)

About the Author: Michael Johnston

Michael Johnston is senior analyst for ETF Reference, and also serves as COO of parent company Poseidon Financial. His investment expertise has been featured in The Wall Street Journal, Barron’s, and USA Today, among other publications. He resides in Chicago.


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