Vanguard dominates North American ETF market growth

New report reveals insights into buying behaviour and asset allocations of major investors in North America and Europe

Vanguard dominates North American ETF market growth
Steve Randall

The growth of the ETF market was strong at the start of 2021 according to a new report from TrackInsight.

It shows that the North American ETF market now totals almost US$6 trillion in assets under management (AUM) with total inflows of $218 billion in the first quarter alone.

The firm’s CEO, Jean-René Giraud, says that the ETF model proved resilient even during the turbulence of the early days of the pandemic and “critical to the emergence of a new world of faster, more dynamic, digital investing.”

The report shows the importance of ESG to ETF investors with 2020 proving a landmark year in this respect. However, there is a growing demand for universal standards such as SASB, reported by 11% of Canadian firms in 2020 and 55% in the US.

The research is based on a survey of more than 370 professional investors with a combined AUM above $345 billion in North America and Europe.

It found that, in North America, Vanguard was responsible for 42% of total flows, adding $95 billion in the first quarter. Assets in its US Active ETFs business grew more than 31% year-over-year to $5.3 billion. Vanguard has a 29% market share in the region but has struggled to compete in Europe with just short of 6% market share.

Ark posted a larger growth rate in the first quarter for its ETF suite in North America at almost 40%, taking AUM to $47 billion.

ETF strategies

“Far from bridging the gap with passive ETFs, which now represents $7.8 trillion in assets under management, actively managed strategies gained ground during Q1 2021 with 15% of net inflows,” said Julien Scatena, Head of Client Solutions at Trackinsight. “Interestingly, the active ETF assets are skewed toward Fixed Income strategies (48% of total AUM), while equity strategies are way ahead in the passive world (80% of total AUM). Since the beginning of the year, their global assets increased by 9.5% (the most significant increase among the different asset classes) to reach $ 6.3 trillion globally.”