Did you know ETFs grew an astonishing 2,650% from 2003 to 2020?!
Not bad, eh?
Whether you already know about them, or are just starting to do your research, the following statistics on exchange-traded funds are sure to increase your knowledge-base.
ETPs vs. ETFs: Exchange-traded funds (ETFs) are just one type of exchange-traded products (ETP). That is to say, they are just one type of investment within a basket of other investment options known collectively as exchange-traded products.
We also briefly go over what ETFs are and how you can buy one, and even provide you with a list of the biggest ETFs by market cap on a global scale. Are you ready to learn more about this enormously popular investment option?
Let’s start with a few key ETF industry statistics:
- The largest individual ETF is the State Street SPDR S&P 500
- 74% of all ETF assets under management are in North America
- The average daily value of U.S. ETF transactions is over $151 billion
- Smart Beta ETFs continue to be more popular in the U.S. than abroad
- Socially responsible exchange traded funds (ETFs) are on the rise
- The technology sector is the leader of U.S. ETFs
What are exchange-traded funds?
An exchange-traded fund is an SEC-registered investment company that offers individual investors an opportunity to pool their money together into a large fund that can hold assets such as:
- commodities, etc.
Most of the ETFs in existence are created to literally mimic the performance of a given market index, such as the S&P 500. They try and hold the same securities, in the same proportions, as their target index. The index tracking isn’t restricted to stocks either, it can be a bond index as well.
An ETF divides itself into shares that it then sells in large blocks to Authorized Participants (not individual retail investors) who then sell the shares to investors. Like a mutual fund an ETF must calculate its Net Asset Value (NAV) at least once a day. Unlike mutual funds, which are bought and sold based on their price at the end of market close, ETFs can be bought and sold throughout the trading day just like stock shares.
Their key selling points are:
- Professional fund management
- Low minimum investment
- Liquidity and trading convenience
Want to see what comprises a particular ETF? No problem, all the holdings are typically listed daily on the issuer’s website or similar platform. However, there do exist non-transparent actively managed exchange-traded funds for which, well you guessed it, aren’t as transparent. Now, let’s have a look at the types of ETFs out there.
Common types of ETFs
- Equity ETFs: These track stocks, so an index like the S&P 500 for example.
- Bond/Fixed Income ETFs: Provide steady returns at potentially lower risk than equity ETFs
- Commodity ETFs: Gold, silver, oil, etc. Often less transparent than stock ETFs.
- Currency ETFs: These will invest in either a single currency or a basket of currencies.
- Specialty ETFs: High-risk high-reward specialty type, it’s a mixture of inverse funds and leveraged funds.
- Inverse funds: Kind of like shorting a stock, these funds go up when the target index goes down.
- Leveraged funds: They leverage the investor cash and borrow on it but multiples. For example, a fund that is 2x leveraged means they’re borrowing $1 for every $1 an investor has put into the fund.
- Factor ETFs: Allows targeting of specific drivers of returns and growth across asset classes through rules-based ETFs. Often you’ll see them referred to as “smart beta” funds.
- Sustainable ETFs: Combines traditional investment approaches with environmental, social and governance insights. This fund type continues to rise in popularity.
No FDIC Insurance: Mutual funds and ETFs are not guaranteed or insured by the FDIC or any other government agency—even if you buy through a bank and the fund carries the bank’s name. You can lose money investing in mutual funds or ETFs
How to invest in ETFs?
First things first, before putting any money into an ETF, determine your financial goals and risk tolerance. There are thousands of choices when it comes to ETFs, literally. So first decide what investment strategy and risk profile is the right one for you. You can get help on this by sitting down with a financial professional, if you’re having difficulties formulating it on your own.
If you’ve ironed out all the details with regards to your investment strategy and risk profile and now are asking yourself, “ok, but how do I buy an ETF?”, here’s a simple three-step process:
- Open a brokerage account: You can do this in person, or over the internet. Many brokers don’t require account minimums either. It’s akin to opening a bank account, and the processing isn’t as daunting as it used to be thanks to the comfort of your home and technology.
- Use screening tools to find and compare ETFs: Most brokers these days offer screening tools to sift through and filter the thousands of ETFs out there. You can set the criteria such as geography, asset type, fund provider, trading performance, industry, commissions, holdings, expenses, etc.
- Place the trade: If you’ve ever bought a stock, the process for buying an ETF is very similar. You’ll want to navigate to your brokers website/app’s trading section, there you’ll type the ETF ticker symbol, enter the number of shares you want to buy, select your order type, enter the desired (or market) price, select your funding source (if not pre-selected), and hit buy, or trade. This should give you the final chance to review and confirm your order, before executing it; so for example if you accidently typed in 1,000 instead of 100 .
On the other hand, if you’re interested in ETFs as an investment but just can’t be bothered to do the heavy lifting, you may want to consider a new invention in the finance space: robo-advisors. They build and manage an investment portfolio for you for a small annual fee (typically 0.25% of the account balance), and they’re quickly becoming mainstream. They continue to grow in numbers and their offerings, from socially responsible investment portfolios to digital financial planning tools, to real-time access to human financial advisors, ’cause, you know, robots!
North American ETF industry facts & statistics
1. The assets under management (AUM) of global ETFs increased from $417 billion in 2005 to over $7.7 trillion in 2020
(Source: Statista I)
The North American region, primarily the United States, continues to constitute the majority of all ETF assets under management. Out of the $7.7 trillion AUM globally, North America accounted for a whopping $5.6 trillion of the global total.
2. BlackRock is the largest ETF issuer in the United States
(Source: Statista V)
As of July 2021, in terms of market share calculated by the value of assets under management, BlackRock is the largest issuer of Exchange Traded Funds in the U.S. They accounted for 35.5% of the 2021 total market share, towering over most other issuers, and are in the U.S. Large-cap segment.
3. The largest individual ETF is the State Street SPDR S&P 500
(Source: Statista IV)
With assets under management north of $378 billion as of July 2021, this S&P 500 tracking ETF known as ‘Spider’ has come a long way since it’s inception in 1993. Fun fact: It was the very first exchange traded fund listed in the U.S. It has a net expense ratio of 0.0945 as of 2021.
4. 74% of all ETF assets under management are in North America
(Source: Mordor Intelligence)
Far, far larger than any other region of the world, the North American ETF industry has under $5.6 trillion of U.S. dollars in assets. Almost three-quarters of ETFs in North America are bought by U.S. investors, with Canadian investors clocking in at 6% and another 6% by Latin American investors; with the remainder being bough by APAC and EMEA oversees investors.
5. There are over 2,200 ETFs in the United States
(Source: Statista I)
The largest North America ETF is the SPDR S&P 500 ETF Trust SPY with over $378 billion in assets. Some of the major players include Vanguard, Invesco, JP Morgan, iShares BlackRock, and WisdomTree Investments.
6. At $2.14 trillion, BlackRock’s iShares has the highest assets under management of any ETF brand in the USA
(Source: Statista I)
Alongside being the largest ETF issuer in the U.S., BlackRock is also the one with the highest assets under management. Not surprising, considering the fact that BlackRock is in fact the world’s largest asset manager. You’d be hard pressed to navigate the ETF world without hearing the word iShares on a regular basis.
7. The New York Stock Exchange has the biggest market share of exchange volume for all U.S. ETFs
As of Q2 2021, the NYSE had a 17.31% share of the total volume of the different exchanges, Nasdaq had a 12.37% share, CBOE BZX had an 8.14% slice of the pie. 2021 already is continuing to see unprecedented numbers, in just 2 months its $30 billion in cash flows had already surpassed the full-year cash flows of all other years prior to 2020.
8. The average daily value of U.S. ETF transactions is over $151 billion
With 2021 off to the races recording unprecedented cash flow numbers and launching over 90 new ETFs, this figure could easily climb even higher. The average daily volume of shares traded was at 1.95 billion as of Q2 2021. That’s a lot of activity!
Interesting global ETF industry trends and statistics
9. There were over 7,600 ETFs globally in 2020
(Source: Statista II)
These financial vehicles have seen a steady rise since their introduction in the early 1990s, constituting one of the main types of investment funds these days, along with mutual funds, insurance funds, real estate funds, pension funds, hedge and private equity funds.
10. Low investment costs are cited as the most important benefit of ETF investing
(Source: Statista III)
According to a 2020 fund managers survey, over 60 percent of the respondents listed low investment costs as one of the main benefits of ETFs, even higher than the ease of trading them. What’s even more interesting is that ‘research and understanding‘ was listed as the least popular ‘benefit’, but at the same time ‘simplicity of ETFs‘ was the second most popular answer. Go figure!
11. Europe accounts for 17% of global ETF assets under management
(Source: Statista I)
With a total of $1.19 trillion dollars in total ETF assets under management as of March 2021. The iShares MSCI World Small Cap UCITS is the leading ETF and had net inflows around $1.17 billion as of March 2021.
12. There are over 1,800 ETFs listed in Europe as of Q2 2021
(Source: Statista I)
The city of Paris had 554 ETFs listed on the Euronext, the highest amount of any other European city.
Some of the top ones include:
- Franklin FTSE Europe ETF
- SPDR Portfolio Europe ETF
- iShares Core MSCI Europe ETF
- JPMorgan BetaBuilders Europe ETF
- Xtrackers MSCI Europe Hedged Equity ETF
- iShares MSCI Europe Small-Cap ETF
- Vanguard FTSE Europe ETF
13. The Asia Pacific region has roughly $690 billion in assets under management of ETFs
(Source: Statista I)
However, as small as it may be comparatively speaking, the growth of this region is the most rapid. It gained an impressive 28.7% of assets under management in 2020, 5 percentage points higher than the North American ETF assets under management (AUM) for the same period. Japan’s iShares MSCI ETF is the largest Asia Pacific ETF in terms of AUM as of Q2 2021.
14. The corporate bond sector was deemed the most attractive fixed income ETF sector to invest in going forward in 2020
(Source: Statista VI)
According to a research survey done in 2020 by Statista, in the next 2 to 3 years, the corporate bond sector looked the most attractive to fund managers. With nearly half of those surveyed listing them as the ETF sector of choice in the near future. The runners up with 42% each were high-yield bonds and emerging market bonds.
15. Smart Beta ETFs continue to be more popular in the U.S. than abroad
(Source: Statista VII)
These fund differ from traditional ETFs by having an additional set of rules for which stocks from a given index should be included in the portfolio at any given time. Otherwise, they too track an index, akin to traditional ETFs.
In the U.S. 59% of investors had 11% or more of their assets under management in smart beta funds, versus the 39% figure in Europe and the 52% in China. The main reason for using smart beta according to fund managers was to obtain returns higher than the benchmarks. Shocking!
16. Socially responsible exchange traded funds (ETFs) were viewed as the favorite type to grow in the near future
(Source: Statista VIII)
People are becoming more and more Eco-conscious. This sentiment has transferred into the world of finance as well, specifically the ETF industry. According to a 2020 survey of fund managers, 59 percent of the respondents said that Environmental, Social, and Governance (ESG) funds are poised to grow the most out of any other ETF type, 17% higher than the 2nd place thematic ETFs.
Additionally, according to a 2021 survey, 9% of professional investors in the U.S. stated that they foresee more than half of their portfolios consisting of socially responsible ETFs over the next five years. Similar trends are seen across the board in China and Europe.
17. Fund managers are expecting their ETF investments in China to double between 2020 and 2023
(Source: Statista IX)
Fund managers expect to increase their ETF investments in China two-fold between 2020 and 2023, from 3% to 6% of their total portfolio. Though seemingly insignificant when compared to the high-amounts invested in the U.S. and Europe, it signifies that China may soon overtake the ‘other’ developed countries, such as Japan for example.
18. 80 percent of Millennials holding ETFs in the United States said they expected ETFs to be their primary investment type going forward
(Source: Statista X)
It turns out Millennials love ETFs. In contrast only 37% of Boomers surveyed in 2019 said they see ETFs being their primary investment type in the near future. This could be due to the value of ETF assets rising significantly over the past two decades across the globe and making them look very appealing at the moment to the younger crowd.
19. The technology sector is the leader of U.S. ETFs in terms of total assets under management
(Source: ETF Database)
The tech sector ETFs have an aggregate of $413.8 billion in assets under management, towering over other sectors by far. It is also the sector with the highest number of ETFs, at 93. The Healthcare sector is in second place with $102.4 billion in AUM, with Financials and Real Estate taking up the 3rd and 4th spots.
20. Fixed income ETFs across both passive and active strategies may dominate issuance and see significant inflows in 2021
(Source: ETF Strategy)
To put it simply, 2020 was not a normal year for anybody! But especially for the stock market, as the pandemic took hold and many financial instruments were put to the test amidst the sudden extreme volatility. Meanwhile, for many investors, ETFs showed themselves to be a great option during those dire times. In the fixed income space in particular, many leveraged the transparency of ETFs for price discovery and the ability to move large blocks of securities intra-day in real-time.
Some believe the demonstrable advantages of ETFs during the third most volatile period in financial history has cemented their use-case in the minds of many investors going forward.
What are the largest ETFs by market cap globally?
(Source: ETF Database)
Below are 25 of the largest exchange-traded funds ranked by assets under management. You’ll also find their average daily volumes going back 3 months. The assets under management figure is calculated by multiplying outstanding shares by the ETF share price.
|Symbol||Fund Name||Assets Under Management||3-mo Avg. Daily Vol.|
|SPY||SPDR S&P 500 ETF Trust||$381,218,000.00||66,901,422|
|IVV||iShares Core S&P 500 ETF||$290,030,000.00||4,376,048|
|VTI||Vanguard Total Stock Market ETF||$255,428,000.00||3,655,738|
|VOO||Vanguard S&P 500 ETF||$236,654,000.00||3,789,155|
|QQQ||Invesco QQQ Trust||$179,351,000.00||38,946,859|
|VEA||Vanguard FTSE Developed Markets ETF||$101,638,000.00||7,936,933|
|IEFA||iShares Core MSCI EAFE ETF||$96,318,500.00||7,437,070|
|AGG||iShares Core U.S. Aggregate Bond ETF||$89,163,900.00||5,424,597|
|VWO||Vanguard FTSE Emerging Markets ETF||$82,331,900.00||8,131,724|
|IEMG||iShares Core MSCI Emerging Markets ETF||$81,912,500.00||8,147,058|
|VTV||Vanguard Value ETF||$81,663,700.00||2,829,273|
|VUG||Vanguard Growth ETF||$80,612,100.00||777,956|
|BND||Vanguard Total Bond Market ETF||$79,365,100.00||5,916,216|
|IWF||iShares Russell 1000 Growth ETF||$70,630,400.00||1,308,767|
|IJR||iShares Core S&P Small-Cap ETF||$70,183,000.00||3,508,828|
|IWM||iShares Russell 2000 ETF||$67,850,100.00||25,375,824|
|IJH||iShares Core S&P Mid-Cap ETF||$62,833,800.00||1,240,652|
|GLD||SPDR Gold Shares||$60,540,000.00||8,749,217|
|VIG||Vanguard Dividend Appreciation ETF||$60,164,700.00||1,242,564|
|EFA||iShares MSCI EAFE ETF||$56,850,800.00||19,746,719|
|IWD||iShares Russell 1000 Value ETF||$53,724,600.00||2,629,403|
|VO||Vanguard Mid-Cap ETF||$50,122,800.00||550,477|
|VGT||Vanguard Information Technology ETF||$48,372,800.00||446,039|
|VXUS||Vanguard Total International Stock ETF||$48,113,400.00||2,890,261|
|VB||Vanguard Small Cap ETF||$46,800,900.00||642,205|
Note on the numbers used in the article: In an effort to paint a fuller picture, the figures in this article were aggregated from numerous credible sources, who reported the results of their surveys at various points in time.
You made it to the other side, congrats!
Hopefully you’ve learned a great deal about what ETFs are and where they’re headed from the numerous statistics above. This industry has achieved tremendous growth since it was first created in the early ’90s, and the market has become very crowded as of late, as is showcased by the value of ETF assets under management only going in one direction over past decade, up!
Statista I | Statista II | Statista III | Statista IV | Statista V | Mordor Intelligence | NYSE | Statista VI | Statista VII | Statista VIII | Statista IX | Statista X | ETF Database | ETF Strategy | SEC.gov | BlackRock