- What are ETF issuers?
- Who are the biggest ETF issuers?
- Which issuers are growing the fastest?
- Which issuer earns the most money?
- ETF Issuer Summary Table
What are ETF issuers?
ETF issuers are the businesses that build and ‘issue’ the ETFs to the public via the ASX. There are over 20 ETF providers in the Australian market supplying over 200 ETFs for investors to use. Our job is to pick the best products on the market which is why we adopt a best of breed approach to recommend ETFs to our clients from a range of issuers.
Our ETF selections have allowed clients to perform better than most of the ETFs that these issuers offer.
Who are the biggest ETF issuers?
Vanguard and iShares continue to dominate the ETF market in Australia with the largest funds under management (FUM). BetaShares has consistently been gaining traction over the last few years after taking 3rd spot from SPDR last year. Combined, the top 3 issuers account for 72% of all money invested in ETFs.
SPDR was one of 8 issuers who lost money, with their assets shrinking by $745k. Interestingly, 6 out of the 8 issuers who lost money (in terms of assets) were active fund managers, further highlighting investors preference for passive index funds.
| TOP 5 ISSUERS | FUM ($b) MAR’20 | ANNUAL CHANGE IN FUM ($b) FROM MAR’19 | MARKET SHARE (%) |
| Vanguard | 17.6 | 3.7 | 31% |
| iShares | 13.9 | 1.8 | 24% |
| BetaShares | 9.3 | 3.0 | 16% |
| SPDR | 5.2 | -0.7 | 9% |
| VanEck Vectors | 3.6 | 1.0 | 6% |
Vanguard continues to dominate while BetaShares keeps increasing their presence in the Australian market at the expense of iShares and SPDR.
Which issuers are growing the fastest?
ETF Securities saw a surge in growth in their assets by 99% thanks largely to their GOLD ETF attracting investor money and the price of the precious yellow metal rising in value. BetaShares FUM has risen 47% with nearly a quarter of all new ETF money invested in BetaShares’ ever expanding product suite.
Issuers who have more than $500m in FUM were included to reduce the impact of outliers due to a low size base.
Vanguard continues to dominate the ETF market in Australia, after seeing an increase of $3.8b in FUM (27% growth). Half of this growth was driven by money pouring into the Vanguard Australian Shares Index ETF (VAS), which is the largest ETF in Australia, as the ETF took in over $1.6b over the year.
iShares is the 2nd biggest ETF provider with its broad suite of ETFs. They grew 15% over the last year thanks to $2.4b in new money coming in, mainly in their iShares Core S&P/ASX 200 ETF (IOZ) which took in $870m. SPDR saw their assets fall by 13% as their inflows could not negate the poor performance of global markets. They are slowly becoming a smaller piece of the ETF pie in Australia.
Which issuer earns the most money?
We thought it would be interesting to examine just how much money these ETF Issuers make. We took the cost of each of the issuer’s underlying ETFs in their product suite and multiplied by the total respective FUM in each ETF to get an annual revenue estimate.
ETF Issuers made an annual revenue of almost $200m from their management fees, with the top 5 revenue making providers accounting for over 80% of the total revenue pool. BetaShares is the top earner thanks to their suite of smart beta and higher cost products. BetaShares earned $45.2m in annual revenue for their 61 ETFs, accounting for almost a third of the Australian market ETFs available. Even though they manage half of Vanguard’s FUM, they make more money because their weighted average ETF cost is almost triple Vanguard’s.
Top 10 ETF Issuers by Revenue
| Issuer | Revenue ($m) | Weighted Avg fee | # of products |
| BetaShares | $45.2 | 0.48% | 61 |
| iShares | $36.0 | 0.26% | 33 |
| Vanguard | $30.2 | 0.17% | 29 |
| Magellan | $29.5 | 1.28% | 3 |
| VanEck Vectors | $14.4 | 0.40% | 21 |
| SPDR | $11.9 | 0.23% | 16 |
| ETF Securities | $10.3 | 0.44% | 17 |
| Platinum | $2.6 | 1.10% | 2 |
| Russell | $5.0 | 0.34% | 5 |
| Montgomery | $0.7 | 1.32% | 1 |
ETF Issuer Summary Table
| Issuer | FUM Mar’19 ($m) | FUM Mar’20 ($m) | Annual Change in FUM ($m) | % Change |
| Vanguard | $13,862 | $17,588 | $3,726 | 27% |
| iShares | $12,088 | $13,928 | $1,841 | 15% |
| BetaShares | $6,346 | $9,347 | $3,002 | 47% |
| SPDR | $5,937 | $5,192 | -$745 | -13% |
| VanEck Vectors | $2,575 | $3,624 | $1,049 | 41% |
| ETF Securities | $1,186 | $2,360 | $1,173 | 99% |
| Magellan | $1,690 | $2,309 | $619 | 37% |
| Russell | $714 | $765 | $51 | 7% |
| Platinum | $497 | $457 | -$41 | -8% |
| Perth Mint | $171 | $456 | $285 | 166% |
| UBS | $284 | $230 | -$54 | -19% |
| ActiveX | $6 | $165 | $159 | 2876% |
| WCM | $62 | $96 | $34 | 54% |
| Montgomery | $96 | $79 | -$17 | -18% |
| Fidelity | $18 | $74 | $55 | 301% |
| Switzer | $75 | $66 | -$9 | -12% |
| Schroder | $54 | $43 | -$10 | -19% |
| Intelligent Investor | $0 | $38 | $38 | – |
| Antipodes | $22 | $22 | $1 | 3% |
| eInvest | $23 | $21 | -$2 | -9% |
| K2 | $31 | $11 | -$20 | -65% |
| Pinnacle | $0 | $10 | $10 | – |
| Morningstar | $0 | $10 | $10 | – |
| Totals | $45.7 | $56.9 | $11.2 | 24% |
