JP Morgan and Goldman Sachs, two banks that have been peripheral players as ETF sponsors, have significantly accelerated their ETF asset-gathering this year.
We used the ratio of year-to-date flows to current net assets as a proxy for asset-gathering momentum.
These two firms were at the top of the list of U.S. sponsors on this metric. (Note: our analysis was limited to sponsors with more than $5 billion in total assets as of Oct. 19, 2018.) The exchange traded funds driving their growth provide exposure to traditional asset classes are already available via existing ETFs, such as Canada (BBCA), Japan (BBJP) and short-term treasurys (GBIL). This indicates that the inflows were driven by accessing pools of money where the firms had some discretionary control, rather than by any significant differentiation in the ETFs themselves.
Whether these firms can maintain this pace and challenge the largest sponsors is unclear. In absolute terms, Blackrock and Vanguard continued to dominate net inflows with $69 billion and $65 billion year-to-date, respectively. These two firms, along with State Street, have had about 80 percent market share in the U.S. ETF industry for several years.
Aniket Ullal is the founder and CEO of First Bridge Data, a provider of independent ETF data and analytics to institutional clients. Previously, he had product management responsibility for S&P’s U.S. indexes, including the widely followed S&P 500 and S&P/Case-Shiller indexes. He is the author of ETF Investment Strategies: Best Practices from Leading Experts on Constructing a Winning ETF Portfolio.