Smart Beta ETF Adoption by Region
In a previous article in October 2016, we defined and sized the global smart beta ETF market as $347B. That total increased to $355B as of year-end 2016, about 10% of global ETFs assets.
In this article we examine smart beta ETF adoption by listing region. The chart below summarizes the rate of smart beta ETF adoption by their primary region of listing.
Source: First Bridge Data; as of Dec 2016
- The US, Canada and Australia have the highest rates of smart beta adoption, with above 10% of total ETF assets in smart beta strategies.
- Europe has a total smart beta adoption rate of 7%, with Latin America at 5% and Africa and Asia are at 2%. (Note that Leveraged & Inverse ETFs are grouped in the ‘Other’ category).
The table below lists the top 5 largest ETFs for 3 different regions.
Table: Top 5 Smart Beta ETFs in US, Canada & Europe
Assets ($M, Dec 2016)
Vanguard Dividend Appreciation ETF (VIG)
Vanguard High Dividend Yield ETF (VYM)
iShares Select Dividend ETF (DVY)
SPDR S&P Dividend ETF (SDY)
iShares Edge MSCI Min Vol USA ETF (USMV)
SPDR S&P US Dividend Aristocrats UCITS ETF (SPYD:GR)
iShares Edge MSCI World Minimum Volatility UCITS ETF (MVOL:LN)
iShares STOXX Global Select Dividend 100 UCITS ETF (SDGPEX:GR)
iShares Edge S&P 500 Minimum Volatility UCITS ETF (SPMV:LN)
SPDR S&P Euro Dividend Aristocrats UCITS ETF (SPYW:GR)
BMO Laddered Preferred Share Index ETF (ZPR:CN)
iShares Dow Jones Canada Select Dividend Index Fund (XDV:CN)
iShares S&P/TSX Canadian Dividend Aristocrats Index Fund (CDZ:CN)
PowerShares 1-5 Year Laddered Investment Grade Corporate Bond Index ETF(PSB:CN)
iShares S&P US Dividend Growers Index Fund CAD (CUD:CN)
Data Source: First Bridge Data; Assets as of Dec 31, 2016
- In the US, dividend ETFs account for almost 50% of all smart beta equity ETFs and the 4 largest smart beta ETFs. The 5th largest is a minimum volatility ETF, where the ETF constituent holdings are selected and weighted to hold securities with low historical volatility.
- In Canada, laddered bond ETFs (classified as smart beta in the First Bridge smart beta definitions framework) have gathered significant assets and are part of the top 5 smart beta ETFs in that region.
While the US and Canada have the highest smart adoption to date, 2017 is likely to be the year where smart beta ETFs may also become more popular in Europe and Asia.
Aniket Ullal is the founder and CEO of First Bridge Data, a provider of independent ETF data and analyticsto institutional clients. First Bridge is not affiliated with any ETF sponsor and does not promote or distribute any ETF products.
This article should not be considered investment advice. Both the author and First Bridge Data LLC shall not be liable for any actions or decisions made based on the information provided in this article. First Bridge Data LLC is not a registered investment advisor or broker, and does not recommend specific securities, funds, or investment strategies, nor does it advocate the purchase or sale of any individual investment vehicle.