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The assets of the fund-traded fund traded on BlackRock exceeded the $ 3 million mark in May for the first time, bringing the global assets of the ETF industry to over $ 9 million.
BlackRock announced last week that the assets of the ETF industry would be $ 15 billion by the end of 2025, increasing the demand for environmentally friendly strategies and making it more usable for debt investors.
According to BlackRock, ETFs currently hold only 3% of their assets in global capital and bond markets.
“There’s been decades of growth for ETFs,” said Salim Ramjik, head of index investments at iShares and BlackRock.
Wall Street has broken the record since April 2020 and big gains for other stock markets have created new business for the ETF industry, where its two main opponents, BlackRock and Vanguard, are competing in a fierce price war.
Investors from around the world spent nearly $ 97 billion on ETFs in May, both in terms of funds and products, and this year achieved a net income of $ 559.3 billion – $ 762.8 million in a course to break the 2020 record set by ETFGI, a London-based consultancy. according to preliminary data.
The arm of BlackRock’s iShares ETF has achieved net income of $ 123.7 billion this year in the first five months of this year, compared to $ 37.4 billion in the same period in 2020 when investor confidence intensified when the coronavirus pandemic escalated.
Pennsylvania-based Vanguard has attracted $ 161 billion in ETF revenue so far in 2021, more than double the $ 66.2 million recorded in January and late May last year. This year, Vanguard has raised about $ 5.2 million in revenue from the U.S. ETF through an agreement that allows customers to convert an existing mutual fund into an ETF.
Over the past decade, global changes have tracked low-cost ETFs, such as the S&P 500 or FTSE 100, which have been a major benchmark in the investment industry, driving mergers and acquisitions to meet the growing power of smaller competitors. BlackRock and Vanguard.
“We are witnessing a tectonic shift with the growth of ETFs that will lead to significant changes in the investment industry worldwide,” said ETFGI founder Deborah Fuhr.
Patrick Davitt, an analyst at Autonomous Research, said the ETF’s entry could be “significantly higher” in Europe and Asia as well as market bonds, challenging traditional asset fund managers.
“It’s a very tough task for active capital managers [due to their inconsistent performance and higher fees] To gain significant revenue against ETFs. Actively managed traditional bond funds will face greater competition from ETFs, ”Davitt said.
The ETF assets managed by State Street Global Advisors exceeded the $ 1 million mark in April. The Boston-based investment manager, the third-largest ETF player behind BlackRock and Vanguard, recorded revenue of $ 32.9 billion this year, up from $ 19.3 billion in the first five months of 2020.
Rory Tobin, global head of State Street ETFs, said “the entire ETF ecosystem is growing in strength,” as adoption extends beyond the U.S. and grows in use across multiple trading and consulting platforms.
“Growth trends in Europe are very encouraging and we have only scratched the surface area of taking ETFs across Asia,” Tobin said.
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