10 Biggest ETF Companies in USA

Published on October 25, 2022 at 11:30 am by Insider Monkey Team in Lists, News

In this article, we will take a look at 10 of the biggest ETF companies in the USA.

ETFs have risen in popularity recently.

Global ETF assets have increased from $3.4 trillion in 2016 to over $10 trillion in November of 2021. According to a January 26, 2022 PwC report, there’s a lot more growth in the future too,

“However, given global ETF AuM growth of 22% over the last five years ending December 2020, combined with record inflows, new entrants, innovative products and distribution opportunities, we believe that a projection of over USD 20 trillion global ETF AUM by 2026 can be achieved, representing a 17% CAGR over the next five years.”

There are several reasons for ETFs’ popularity.

ETFs can be low cost. In terms of actively managed mutual funds, the expense ratio can be between 0.5% of assets every year to 1.5% of assets every year. In comparison to actively managed mutual funds, most passive ETFs cost less.

When picked correctly, ETFs can offer diversification and some ETFs also have a long history of success as well. While many ETFs do not do as well because they cover sectors that don’t do very well, some ETFs have done well in the long run. One such example is biggest ETF of all, the SPDR S&P 500 ETF.

According to its data, the SPDR S&P 500 ETF, as of September 30, 2022, has averaged an annual return of 11.56% in terms of its NAV over the last 10 years. Moreover, The SPDR S&P 500 ETF’s performance tracks closely to its intended benchmark, the S&P 500 index, which has had average annual returns of 11.7% over the last 10 years as of September 30, 2022

2022

Given the market decline this year, however, the SPDR S&P 500 ETF is down almost 24% year to date as of September 30, 2022.

2022 has been a challenging year for the financial markets as the Federal Reserve has increased interest rates five times this year given the high inflation. Given the higher interest rates, the probability of a recession has increased substantially as a result. Some economists think that the odds are over 60% while others think it’s even higher.

BlackRock, Inc. (NYSE:BLK) explains its thinking on the events and its potential effects,

“In the Great Moderation, a period of steady growth and inflation, central banks would have eased policy on signs of contracting growth. That era is over. Now central banks are set to induce recessions by overtightening policy. In this supply-driven recession, high inflation and rising rates may break the fragile equilibrium where investors tolerated surging debt loads and forwent a higher term premium, or compensation for the risk of holding long-term bonds.”

Due to the headwinds, many asset classes have fallen substantially year to date. Emerging market equities, U.S. equities, global high yield, U.S. 10 Year Treasury, European equities have all fallen more than 10% year to date and in some cases more than 20%. Given the poor performances, ETFs have experienced headwinds as lower asset prices mean less fees.

Nevertheless, there still have been inflows to ETFs despite the challenging market.

Director of ETF Research and Analytics Elisabeth Kashner commented, “First half 2022 flows of $332 billion exceed full-year levels for every year from 1993-2016, nearly match full-year 2018 and 2019 flows, and equal 64% of full-year 2020 flows.”

Financial Companies That Have Benefited

In terms of the companies that have benefited from the rise of ETFs, ETF issuers are among the chief beneficiaries.

Given the U.S. economy is the largest in the world and the U.S. dollar is the leading global reserve currency, most of the leading financial companies that issue ETFs are based in the USA. Some, such as JPMorgan Chase & Co. (NYSE:JPM), The Charles Schwab Corporation (NYSE:SCHW), State Street Corporation (NYSE:STT), and BlackRock, Inc. (NYSE:BLK) are also listed on the NYSE.

Although the financial companies don’t make as much revenue as mutual fund companies do from their assets, the sheer amount of assets can still make offering ETFs profitable for the largest financial institutions.

The following are 10 of the largest ETF issuers based in the USA.

Trump International Hotel & Tower, New York City

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Methodology

For our list, we took the top 10 from Statista’s Largest providers of Exchange Traded Funds (ETFs) in the United States as of July 2022, by assets under management list.

10 Biggest ETF Companies in USA

10. VanEck

ETF Assets Under Management: $51.93 billion

VanEck is an innovative U.S. asset manager. VanEck was one of the first U.S. asset managers to offer American investors access to international markets and the company also recognized early the transformative potential of ETFs. As a result, VanEck is one of the 10 biggest ETF companies in the USA today with ETF assets under management of almost $52 billion.

Like VanEck, The Charles Schwab Corporation (NYSE:SCHW), State Street Corporation (NYSE:STT), and BlackRock, Inc. (NYSE:BLK) are among the biggest ETF companies in the USA.

9. ProShares

ETF Assets Under Management: $57.68 billion

ProShares has been at the forefront of the ETF revolution since 2006 as it has a broad portfolio of ETFs that allow investing in dividend growers, thematic investing, ex-sector investing and more. Ex-Sector investing in certain ETFs allows investors to tailor the S&P 500 by making it simple to underweight or even exclude one sector from a portfolio. This could be useful if an investor believes one sector will underperfrom another sector in the future. As of July 2022, ProShares had ETF Assets Under Management of almost $57.7 billion.

8. World Gold Council

ETF Assets Under Management: $66.46 billion

According to the Wall Street Journal, “The World Gold Council, a group funded by mining companies, sought to revive gold demand by making it easier to buy and sell physical metal. They hit upon an ETF, still a relatively obscure investment product at that time. ETFs sell shares and use the proceeds to buy another asset, such as gold or stocks. GLD launched on Nov. 18, 2004 under State Street Corp.’s now-defunct streetTRACKS brand, later renamed SPDR.”

As a result of investor interest, World Gold Council has ETF assets under management of $66.46 billion according to Statista. The $66.46 billion could be characterized as part of State Street Corporation (NYSE:STT) depending on the exact terms of the ETF.

7. JPMorgan Chase & Co. (NYSE:JPM)

ETF Assets Under Management: $78.85 billion

JPMorgan Chase & Co. (NYSE:JPM) is a leading financial institution that does many different things including issuing ETFs. In terms of ETFs, the company has more than 30 ETFs offered across asset classes and also management strategies. Some ETFs include market cap-weighted ETFs while others include equity ETFs. As of July 2022, JPMorgan Chase & Co. (NYSE:JPM) had ETF Assets Under Management of almost $79 billion.

While JPMorgan Chase & Co. (NYSE:JPM) is one of the larger ETF companies in the USA, the bank also offers a lot of other services such as consumer, corporate, and government banking.

For its third quarter of 2022, JPMorgan Chase & Co. (NYSE:JPM) reported net income of $9.7 billion and revenue of $32.7 billion. The company realized an ROTCE of 18% and a CET1 capital ratio of 12.5%. JPMorgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon said,

In the U.S., consumers continue to spend with solid balance sheets, job openings are plentiful and businesses remain healthy. However, there are significant headwinds immediately in front of us – stubbornly high inflation leading to higher global interest rates, the uncertain impacts of quantitative tightening, the war in Ukraine, which is increasing all geopolitical risks, and the fragile state of oil supply and prices. While we are hoping for the best, we always remain vigilant and are prepared for bad outcomes so we can continue to serve customers even in the most challenging of times.

6. First Trust

ETF Assets Under Management: $128.98 billion

First Trust is a U.S. based asset manager that was founded in 1991 that had collective assets under management or supervision of around $193 billion as of August 31, 2022. In terms of ETFs, First Trust has ETF assets under management of almost $129 billion as of July 2022, ranking it #6 on our list of 15 Biggest ETF Companies in USA.

The Charles Schwab Corporation (NYSE:SCHW), State Street Corporation (NYSE:STT), and BlackRock, Inc. (NYSE:BLK) are also among the biggest ETF companies in the USA.

5. The Charles Schwab Corporation (NYSE:SCHW)

ETF Assets Under Management: $239.22 billion

The Charles Schwab Corporation (NYSE:SCHW) is a leading investment services firm with over $6.6 trillion in assets. Over time, The Charles Schwab Corporation (NYSE:SCHW) has grown from a discount brokerage into a leading investment services firm and a leader in asset management and also retirement planning. In terms of its operations, The Charles Schwab Corporation (NYSE:SCHW) has 33.9 million brokerage accounts, 2.3 million corporate retirement plan participants as well as 1.7 million banking accounts. The company also offers 25 low cost ETFs that cover a range of asset classes and fund companies. As of July 2022, The Charles Schwab Corporation (NYSE:SCHW) had ETF assets under management of almost $240 billion.

4. Invesco

ETF Assets Under Management: $334.45 billion

Invesco is a global investment firm with around 8,400 employees in over 26 countries with a total of $1.3 trillion in client assets as of September 30, 2022. In terms of its ETFs, the company offers over 200 ETFs and manages around $334.45 billion in ETF AUM as of July 2022. Given its ETF AUM, Invesco ranks #4 on our list of 10 Biggest ETF Companies in USA.

3. State Street Corporation (NYSE:STT)

ETF Assets Under Management: $874.17 billion

State Street Corporation (NYSE:STT) is a leading investment services firm that is the issuer of the most popular ETF, the SPDR S&P 500 ETF Trust. In addition to its other ETFs, State Street Corporation (NYSE:STT) has ETFs Assets Under Management of $874.17 billion which ranks it 3rd among the 10 biggest ETF companies in USA.

For its third quarter, State Street Corporation (NYSE:STT) reported EPS of $1.82 when excluding notable items, down 9% year over year. Total revenue fell 1% year over year to $3 billion as the lower equity and fixed income market levels caused State Street Corporation (NYSE:STT)’s fee revenue to decline 8% year over year. For the quarter, the company returned $232 million to shareholders through a declared common dividend of $0.63 per share. State Street Corporation (NYSE:STT) also intends to buy back around $1 billion of common stock in the fourth quarter of 2022.

2. Vanguard

ETF Assets Under Management: $1.8 trillion

With $1.8 trillion in ETF assets under management, Vanguard is the second largest issuer of ETFs in the USA.

Vanguard’s ETF business has been a growing one as well as the company’s ETF business has gathered inflows of $656 billion from the beginning of 2020 according to a September 2022 Financial Times article. That’s even higher than first place BlackRock, Inc. (NYSE:BLK)’s iShare’s inflows of $411 billion over the same period.

Head of research at VettaFi Todd Rosenbluth said, “The race in the US ETF market will be far from over even if the leadership baton does pass from BlackRock to Vanguard. Both managers are winning a disproportionately large share of an [ETF] pie that is continuing to grow.”

Together Vanguard and BlackRock, Inc. (NYSE:BLK) account for over 60% of the U.S. ETF market.

1. BlackRock, Inc. (NYSE:BLK)

ETF Assets Under Management: $2.11 trillion

With $2.11 trillion in ETFs under assets, BlackRock, Inc. (NYSE:BLK) is the largest ETF issuer in the USA.

BlackRock, Inc. (NYSE:BLK) captured the lead in the ETF industry by buying the popular iShares ETF business from Barclays in 2009. The acquisition has been a good one as the iShares ETF business has grown substantially. BlackRock has a broad set of ETFs that try to appeal to institutional as well as retail clients.

For its third quarter, BlackRock, Inc. (NYSE:BLK) reported adjusted EPS of $9.55 on revenue of $4.31 billion down 16% and 15% year over year respectively. In the quarter, the company repurchased $375 million shares and it ended the period with total AUM of over $9.46 trillion.

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