Total assets in ETFs in the U.S. have grown to $1.86 trillion as of June 30, according to First Bridge, an ETF data provider. This compares to total U.S. assets of $1.7 trillion at the end of 2013, representing a 9.3% growth in assets due to market appreciation and net inflows.
The top three players Blackrock, State Street and Vanguard currently dominate U.S. ETF market share, holding more than 80% of total assets as of mid-2014, a percentage that has remained relatively unchanged since 2012.
In response to the opportunity ETFs present, traditional mutual fund providers like Fidelity are entering the space. However these firms have yet to take significant market share from the established ETF providers, says Aniket Ullal, founder of First Bridge Data. Providers and managers note that new ETF sponsors will need to meaningfully differentiate themselves either in their distribution strategy or product offerings. There is still significant opportunity for growth, but new players will take time to establish a foothold and gain market share.
Another important development this year is the increased availability of new ETFs that provide exposure to specific strategies or risk factors, says Ullal. This is particularly relevant to financial advisors who may want to incorporate currency hedged equity, low volatility or 'high quality' factor exposure into their client portfolios.
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