) iShares. State Street's State Street Global Advisors (NYSE:
). Vanguard. The trio represents the dominant names in the ETF
business. Some have even made the spurious accusation that the
an ETF monopoly
To be sure, these firms are home to the bulk of ETF assets.
show just how big iShares, SSgA and Vanguard are. Vanguard is
number three in that group, but the firm had $233.3 billion in
ETF assets under management as of October 5. That is more than
triple the AUM of Invesco's (NYSE:
) PowerShares unit, the fourth-largest ETF issuer.
iShares had $531 billion in AUM and SSgA had $333.3 billion,
according to the data, and it is numbers like that lead some to
think the ETF business is closed to new entrants.
On the contrary, there is room for more competitors and ETF
inflows highlight as much. In 2006, there were just
16 ETF issuers, but today that number has nearly
. In other words, there is room at the ETF party for other fund
sponsors to flourish. Here are some noteworthy examples.
WisdomTree is often referred to as the only publicly traded
pure-play ETF sponsor. There is some debate around the
small-cap stock's valuation
with naysayers saying the valuation assumes a rapid accumulation
of assets that will be tough to meet.
The company appears up to the task. As of May 21, WisdomTree
had $14.7 billion in AUM,
according to Index Universe data
. That number was $16.9 billion as of October 5.
Some have said WisdomTree is a takeover target. Critics assert
that a larger rival does not need to acquire WisdomTree because
it can just copy the firm's ETF ideas. True, but that assertion
is deeply flawed in that it does not consider the deep
first-to-market advantage many WisdomTree ETFs have.
Northern Trust (NASDAQ:
The world's 15th-largest asset manager was in the ETF game up
until 2009, when the firm scrapped its lineup of low-asset
products. Give Northern Trust credit for learning from its
mistakes and persistence. Under the FlexShares name, Northern
Trust's ETF push has been reborn.
The firm introduced four new ETFs in late 2011 and those funds
eclipsed $1 billion in combined assets under management in about
10 months. FlexShares ETFs had $816 million in AUM as of May 21,
but the number swelled to almost $1.7 billion as of October
The FlexShares Morningstar Developed Markets ex-US Factor Tilt
Index ETF (NYSE:
), one of the two newest FlexShares ETFs, is not even a month old
and has already topped $10 million in AUM.
First Trust's move to almost $8.2 billion in AUM from $7.4
billion over the past five months is solid, though not
jaw-dropping. Still, this is the ninth-largest ETF issuer and one
that has made a connections with investors - institutional and
retail - by offering different spins on common ETF themes.
For example, First Trust's
AlphaDEX suite of sector funds
are not carbon copies of traditional sector ETFs. There is
nothing wrong with that as many of the AlphaDEX funds have
outperformed traditional counterparts. Importantly, all of the
AlphaDEX sector funds have more than $100 million in AUM.
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