Growth in the exchange-traded fund (ETF) industry exploded since these funds were first introduced in the early 1990s. These investment vehicles are pooled securities with some similarities to mutual funds, yet distinct differences. ETFs invest in a bundle of assets such as stock in various companies, government bonds, or commodities. They usually track an underlying index, such as the S&P 500. Unlike mutual funds, they trade on exchanges the same way stocks do.
Investors have a wide selection of ETFs to choose from with thousands of them currently trading globally. There is no shortage of companies that offer these funds. But the largest ETF companies dominate the ETF market.
The five largest ETF companies control the vast majority of total assets under management (AUM) in the ETF universe. We take a closer look at these companies below, which are ranked by AUM. Data is courtesy of VettaFi as of May 14, 2024. The revenue figures cited below are based on the website's estimates of each issuer's revenue generated from its own ETF business.
Key Takeaways
- Exchange-traded funds are a popular type of investment that operate similarly to mutual funds but trade on exchanges just like stocks.
- ETFs are pooled securities that often track an index, and own assets such as stocks, bonds, and commodities.
- Investors can choose from a variety of ETFs that trade globally.
- BlackRock's iShares is the largest provider of ETFs as calculated by assets under management.
- Other major ETF providers include Vanguard, State Street, Invesco, and Charles Schwab.
1. BlackRock Financial Management
- Assets Under Management (AUM): $2.76 trillion
- Number of ETFs Offered: 430
- Revenue: $4.37 billion
- 3-Month Fund Flow: $43.95 billion
- Average AUM-Weighted ETF Expense Ratio: 0.16%
BlackRock (BLK) is the world's largest asset management firm that's primarily a mutual fund and ETF management company. BlackRock is a publicly-traded company and issues its family of ETFs under the iShares name. iShares is a subsidiary of the company.
The largest iShares ETFs include:
- iShares Core S&P 500 ETF (IVV), which tracks the S&P 500 Index and has $454.91 billion in AUM
- iShares Core MSCI EAFE ETF (IEFA), which tracks developed markets outside North America, with $117.43 billion in AUM
2. Vanguard
- Assets Under Management (AUM): $2.56 trillion
- Number of ETFs Offered: 86
- Revenue: $1.33 billion
- 3-Month Fund Flow: $60.17 billion
- Average AUM-Weighted ETF Expense Ratio: 0.05%
Vanguard offers investment management and advisory services. It is primarily a mutual fund and ETF management company. The company is uniquely structured: it is owned by its funds, which are owned by shareholders. Thus, Vanguard is owned by its shareholders and there are no outside investors. This structure allows the company to charge very low expenses on its funds.
Vanguard's largest ETFs include:
- Vanguard Total Stock Market ETF (VTI), which tracks thousands of U.S. stocks of various market caps and has $375.1 billion in AUM
- Vanguard S&P 500 ETF (VOO), which tracks the S&P 500 Index and has $425.6 billion in AUM
Because most ETFs are passively managed, they commonly come with lower expense ratios. This makes them an inexpensive and attractive investment. But keep an eye out for any ETFs that are actively managed, which are characterized by higher expense ratios.
3. State Street
- Assets Under Management (AUM): $1.21 trillion
- Number of ETFs Offered: 135
- Revenue: $1.41 billion
- 3-Month Fund Flow: $13.62 billion
- Average AUM-Weighted ETF Expense Ratio: 0.12%
State Street SPDR ETFs are issued by State Street Global Advisors, which is the asset management division of State Street Corp. (STT), the publicly-traded financial services company. State Street's products and services include custody, accounting, administration, international exchange services, cash management, asset management, securities lending, investment advisory services, and more.
The largest SPDR funds include:
- SPDR S&P 500 ETF (SPY), which tracks the S&P 500 Index and has $514.50 billion in AUM
- SPDR Gold Shares (GLD), which tracks the spot price of gold bullion and has $62.68 billion in AUM
4. Invesco
- Assets Under Management (AUM): $514.78 billion
- Number of ETFs Offered: 221
- Revenue: $1.33 billion
- 3-Month Fund Flow: $17.34 billion
- Average AUM-Weighted ETF Expense Ratio: 0.26%
Invesco ETFs are issued by Invesco (IVZ), a publicly-traded company involved in a broad range of investment management activities for individual and institutional customers. In addition to ETFs, the firm offers mutual funds, closed-end funds, retirement plans, and unit trusts.
The largest ETFs offered by Invesco include:
- Invesco QQQ (QQQ), which tracks the 100 largest companies listed on the Nasdaq and has $248.36 billion in AUM
- Invesco S&P 500 Equal Weight ETF (RSP), which tracks an equal-weighted allocation of the 500 companies that make up the S&P 500 Index and has $54.14 billion in AUM
5. Charles Schwab
- Assets Under Management (AUM): $339.96 billion
- Number of ETFs Offered: 30
- Revenue: $265.32 million
- 3-Month Fund Flow: $3.86 billion
- Average AUM-Weighted ETF Expense Ratio: 0.08%
Charles Schwab ETFs are issued by The Charles Schwab Corp. (SCHW), a publicly-traded investment services company that is structured as a savings and loan holding company, because they also offer bank accounts. The firm provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services.
The largest Schwab ETFs include:
- Schwab U.S. Dividend Equity ETF (SCHD), which tracks dividend-paying U.S. equities with $55.99 billion in AUM
- Schwab International Equity ETF (SCHF), which tracks large- and mid-cap stocks from developed markets outside the U.S. with $37.69 billion in AUM
