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Friday, February 10, 2017

Punching Above Your ETF Weight

News summary by MFWire's editors

Fundsters looking to break into the ETF business or expand their presence there, take heed of some lessons from Dave Nadig.

Dave Nadig
Chief Executive Officer
The ETF.com chief wonders, "Is anyone getting rich here" in the ETF business? Nadig looks at ETF industry AUM marketshare, then uses expense ratios to estimate where revenue flows.

By Nadig's estimation, these are some big ETF shops that punch above their AUM weight: BlackRock iShares, 39.87 percent of industry revenue, 38.42 percent of AUM; Invesco PowerShares, 6.97 percent of revenue, 4.32 percent of AUM; First Trust, 4.58 percent of revenue, 1.62 percent of AUM; ProShares, 3.4 percent of revenue, 0.98 percent of AUM; WisdomTree, 3.14 percent of revenue, 1.53 percent of AUM; Van Eck, 2.84 percent of revenue, 1.28 percent of AUM; Guggenheim, 2.01 percent of revenue, 1.25 percent of AUM; and Direxion, 1.73 percent of revenue, 0.43 percent of AUM.

In terms of asset classes and strategies, Nadig finds that international equities, commodities, international fixed income, asset allocation, leveraged, alternative, inverse, currency, and smart beta ETFs all bring in more than their ETF AUM share of revenue. And though ETFs with 20 basis points or less in expenses account for nearly 65 percent of industry AUM, they bring in less than 30 percent of industry revenue. 

Edited by: Neil Anderson, Managing Editor

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