MutualFundWire.com: How Does Invesco-Guggenheim Change the ETF Landscape?

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Friday, October 6, 2017

How Does Invesco-Guggenheim Change the ETF Landscape?

Invesco's long-awaited, $1.2-billion deal to Guggenheim Investments' ETF business won't push Marty Flanagan's shop up in the rankings, but it will solidify its spot, at least for now.

Nir Kaissar of Bloomberg ponders the deal one week after the announcement, wondering if Invesco can break the hold the ETF industry's "big three" (BlackRock, Vanguard, and SSgA) have over AUM and flows. Yet perhaps the Guggenheim deal is less about rivaling the big three and more about staving off the next ten.

5/22/2012

Top Ten

ETF Family	ETF AUM	Market Share
1) BlackRock iShares	$471B	41.4%
2) SSgA	$277B	24.3%
3) Vangaurd	$198B	17.4%
4) Invesco PowerShares	$64B	5.7%
5) VanEck	$23B	2%
6) ProShares	$22B	2%
7) WisdomTree	$15B	1.3%
8) Guggenheim	$9B	0.8%
9) First Trust	$7B	0.7%
10) Barclays	$7B	0.6%
TOTAL	$1.093T	96.1%
TOP THREE TOTAL	$945B	83.1%

A quick glance at current and historical ETF industry data shows that the whole market is growing rapidly, as everyone knows, and that it's still extremely concentrated. Yet the concentration has slipped a little in the last five years, and marketshare has not remained static. Looking at ETF.com's latest "ETF league table", as of October 4, 2017 (this Wednesday), the big three held a combined $2.627 trillion in ETF AUM, accounting for 82.3 percent of all ETF assets. The oldest ETF.com league table we could find, from May 21, 2012, shows the big three holding $945 billion, amounting to 83.1 percent of the market back then. And while ETF.com only tracked 46 ETF families back in 2012, they now track 87.

10/4/2017

Top Ten

ETF Family	ETF AUM	Market Share
1) BlackRock iShares	$1.268T	39.7%
2) Vangaurd*	$794B	24.9%
3) SSgA	$564B	17.7%
4) Invesco PowerShares	$130B	4.1%
5) Schwab*	$89B	2.8%
6) First Trust	$53B	1.6%
7) WisdomTree	$45B	1.4%
8) Guggenheim	$38B	1.2%
9) VanEck	$33B	1.2%
10) ProShares	$29B	0.9%
TOTAL	$3.043T	95.3%
TOP THREE TOTAL	$2.627T	82.3%

* denotes increase in ranking from 2012

Invesco's assets have grown dramatically in those five years, from $64 billion in 2012 to $130 billion now, yet its marketshare in the growing ETF marketplace has slipped, from 5.7 percent to 4.1 percent. Guggenheim's assets have also grown, from $9 billion to $38 billion, and its marketshare has risen from 0.8 percent to 1.2 percent.

Perhaps Flanagan and his team have their eyes on a firm that didn't even make the top 10 in ETF AUM five years ago: Charles Schwab. Schwab had $6 billion in ETF assets on May 21, 2012, accounting for 0.6 percent of the marketplace and ranking 11th in assets (compared to Invesco at fourth and Guggenheim at eighth). Yet Schwab now ranks fifth with $89 billion, accounting for 2.8 percent of the marketplace. The only other big marketshare shifter in the top ten in the past five years is Vanguard, which roughly switched places and percentages with SSgA.

Invesco + Guggenheim Combined

10/4/2017

Top Ten

ETF Family	ETF AUM	Market Share
1) BlackRock iShares	$1.268T	39.7%
2) Vangaurd	$794B	24.9%
3) SSgA	$564B	17.7%
4) Invesco + Guggenheim	$168B	5.3%
5) Schwab	$89B	2.8%
6) First Trust	$53B	1.6%
7) WisdomTree	$45B	1.4%
8) VanEck	$33B	1.2%
9) ProShares	$29B	0.9%
10) Northern Trust	$15B	0.5%
TOTAL	$3.058TT	95.7%
TOP THREE TOTAL	$2.627T	82.3%

Adding the Guggenheim business, as the numbers stand right now, would push Invesco's ETF AUM to $168 billion and 5.3 percent marketshare, nearly double Schwab's presence.

Printed from: MFWire.com/story.asp?s=57103

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