Todd Rosenbluth is director ofexchange-traded fund and mutual fund research at S&P Global Market Intelligence.The S&P Global Market Intelligence rankings for ETFs and mutual funds, availablethrough MarketScope Advisor, are quantitatively derived and based on performance,risks, costs and a qualitative analysis of the underlying holdings.
Withseveral new ETFs focused on thematic or smart beta strategies launching each weekin the U.S., it is easy to lose sight of the fact that most of the $2.2 trillionasset base is inside the largest products.
Theselargely market-cap weighted equity and fixed income strategies, generally from iShares,Vanguard Group Inc. andState Street Global Advisors, form the core of many portfolios.
The 50ETFs with the most assets held $1.28 trillion according to ETF.com's midyear data,equal to 57% of the industry's asset base. Though their share of new money was modestlylower, at 54% of the net inflows, continued interest in well-diversified ETFs suchas Vanguard 500 Index (VOO) and iShares Core Aggregate Bond (AGG), offset outflowsto the $176 billion SPDR S&P 500 (SPY).
EquityETFs invested in U.S. securities were most represented on the top-50 list, with29 products that had $11.9 billion or more in assets at the midyear mark. The broadercategory had $1.2 trillion, aided by $7 billion of net first-half inflows. 's iShares S&P500 (IVV) and Vanguard Total Stock Market Index (VTI), the second- and third-largestofferings with $72 billion and $60 billion, respectively, gathered new money inthe first half, as did Vanguard Value (VTV) and SPDR S&P MidCap 400 (MDY).
Meanwhile,equity ETFs holding non-U.S. stocks faced $9.7 billion of net redemptions. ISharesMSCI Japan (EWJ) and Vanguard FTSE Europe (VGK) were among the 11 ETFs in the top-50to shed assets. Among the bright spots were the more regionally diversified VanguardFTSE Developed Markets (VEA) and Vanguard Emerging Markets (VWO), which gathered$5.0 billion and $1.2 billion, respectively in the first half of the year.
Thoughthe U.S. fixed-income ETF universe is smaller, at just $384 billion in assets, the$42 billion of first-half inflows was significantly stronger than all other categories.All but one of the 10 fixed income products in the industry's top 50 gathered newmoney in the first six months of the year, led by AGG's $6.8 billion. IShares iBoxx$ Investment Grade Corporate Bond (LQD) and iShares TIPS Bond (TIP) pulled in $3.5billion and $2.9 billion, respectively. Only iShares iBoxx $ High Yield CorporateBond (HYG) experienced outflows, though at $247 million, it had only a minor impacton its $15 billion asset base.
The loneETF outside of these three categories in the top 50 is SPDR Gold (GLD), which returnedto popularity in the first half of 2016. The strategy boasts $40 billion in assets,$12 billion of which have come in the door this year.
Thoughit might seem difficult to take share away from well-established ETFs that launcheddecades ago, certain theme-based funds have broken through. IShares USA MinimumVolatility (USMV), which is a smart-beta product launched in 2011 focused on , pulled in $6billion of new money in the first half of the year and now has $14 billion in assets.And though it experienced outflows amid currency fluctuations, Deutsche x-TrackersMSCI EAFE Hedged Equity (DBEF) now boasts $11 billion in assets. It also rolledout in 2011.