BlackRock and Vanguard poised to dominate active ETF space


BlackRock (NYSE:BLK) and Vanguard, the two leaders in passive funds, may be poised to boost their standing in actively traded exchange traded funds as well, the Financial Times reports, citing a survey conducted by JPMorgan Asset Management.

The survey of 320 institutional investors with combined assets of $12.9T found that BLK and Vanguard are the two asset managers they would prefer to manage their active ETF investments. The two ETF giants were specifically named for delivering the strongest performance and the best value for money.

BlackRock and Vanguard, which together control $3.8T of the $7T global ETF market, currently hold the fifth and 13th spot in active space, which is led by First Trust, Pimco, and JPMorgan Asset Management, according to ETFGI.

Certainly, name recognition accounts for BlackRock and Vanguard’s strong positions in the JPMorgan survey on active ETFs. But Jed Laskowitz, global head of asset management solutions at JPMorgan Asset Management, argues that other managers have an opportunity to gain sizeable shares in the growing market.

“The story is yet to be written on active,” he said. “Nine of the top 10 active funds globally are fixed income strategies, and as more investment managers get more comfortable with some of the non-transparent strategies and enter the format with active equity ETFs, I think there is a tremendous opportunities for many active managers.”

Active ETF assets have almost quadrupled to $194B since the end of 2016, according to ETFGI data, as regulatory changes have allowed ETFs that don’t fully disclose their holdings on a daily basis.

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Deborah Fuhr, founder of ETFGI, sees potential for specialist active managers to take their share of the active ETF market as it’s “going to be challenging” for some of the passive giants to dominate active ETFs “if they haven’t been able to deliver alpha.”

In June, BlackRock filed prospectuses for three actively managed ETFs — the BlackRock Future Health ETFBlackRock Future Innovators ETF, and the BlackRock Future Tech ETF.

See the latest ETF analysis on SA and ETF performance by sectors.





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