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May 31, 2024

Friday Facts: A Review of the Largest ETFs in the World

by Detlef Glow.

A view of the table of the 20 largest ETFs in the world by assets under management shows that the assets in the global ETF industry are highly concentrated. The 20 largest ETFs account for $3,431.0 bn, or 28.80%, of the overall assets held by ETFs globally.

As to be expected from the overall split of the assets under management in the global ETF industry by domicile, the U.S. is the dominant ETF domicile—17 of the largest 20 ETFs are domiciled in the U.S., while two are domiciled in Japan, and one in Ireland.

Graph 1: The 20 Largest ETFs Globally by Assets Under Management as of April 30, 2024 (in bn USD)

Review of the 20 Largest ETFs Globally as of April 30, 2024

Source: LSEG Lipper

Given the fact that equity U.S. ($4,000.4 bn) is the largest Lipper global classification for ETFs globally, it is no surprise that the table of 20 largest ETFs is dominated by ETFs classified as Equity U.S., since 10 of the largest 20 ETFs are based on an U.S. large- or all-cap indices. These ETFs account for $2,376.4 bn, or 59.40%, of the overall assets invested in ETFs classified as equity U.S.

Nevertheless, it is somewhat surprising to see only two bond ETFs on the table of the 20 largest ETFs in the world since bonds were always a core part of portfolios and returned to the favor of investors over the course of 2023. With regards to this, it is no surprise that the two bond ETFs on the table are investing in broad bond indices and not single segments such as corporate bonds or rating buckets.

In addition, it is also somewhat surprising that there are two emerging markets equities ETFs on the list of the 20 largest ETFs in the world because emerging markets equities are considered a natural habitat for active management and normally not a core holding in investors’ portfolios.

These statistics show that the global ETF industry is highly concentrated, which is no surprise, since the U.S. was the first market where ETFs were sold, hence the successful ETF promoters from the U.S. had the experience and the funding to expand their businesses globally. In addition, the U.S. is the largest equity market in the world, which means that investors around the globe tend to have a high share of their portfolios invested in U.S. equities, as they often want to have the weightings of their portfolio allocations somewhat close to their benchmark.

 

This article is for information purposes only and does not constitute any investment advice.

The views expressed are the views of the author, not necessarily those of Lipper or LSEG.

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