<font color=red>Morningstar's ETF conference</font> iShares, Vanguard top Morningstar ETF awards

Newer entrants capture a few but the giants expected to maintain stranglehold.
OCT 03, 2013
By  JKEPHART
In the exchange-traded-fund world, it's BlackRock Inc.'s iShares and The Vanguard Group Inc., followed by everyone else. iShares was named the top provider of U.S. stock, international stock and taxable-bond ETFs at the second annual Morningstar ETF Awards. Vanguard was named the top provider of sector ETFs, the only other broad category. Morningstar ranked the best-in-class ETFs in 40 categories, both for buy-and-hold investors and those who trade more frequently. Combined, iShares and Vanguard were named the best in class in 54 of the 80 categories Morningstar ranked. “It's becoming increasingly difficult to compete in the core categories,” said Ben Johnson, director of passive fund research at Morningstar. “Over time, as these particular categories become more and more commoditized, it won't be winner takes all, but it will be winner takes most.” For iShares and Vanguard, their size has enabled them to do so well in the awards, as they've passed the benefits of their scale on to investors, Mr. Johnson said. iShares and Vanguard are the biggest and third-biggest ETF companies, respectively, and combined, they manage more than $875 billion in ETF assets, or just over 57% of all ETF assets. Even though newer entrants to the ETF world, such as Charles Schwab Investments, were able to nab some awards — the Schwab U.S. Broad Market ETF (SCHB) was named best large-cap-blend ETF in the investor category, for example — iShares and Vanguard aren't expected to lose their stranglehold on the top categories. “The incumbents are firmly entrenched, and I don't see that changing anytime soon,” Mr. Johnson said. One area where there could be a shake-up is between iShares and Vanguard. Because Vanguard changed the underlying index of 22 of its ETFs last October, those ETFs weren't eligible for the main categories since they don't have a full year of tracking the new indexes, which Morningstar requires to be eligible.

Latest News

Five-person Raymond James team jumps to Janney in Maryland
Five-person Raymond James team jumps to Janney in Maryland

The group led by a 37-year industry veteran brings $470 million in assets to the Philadelphia-based broker dealer.

$20B Merit looks to next phase as Constellation takes minority stake
$20B Merit looks to next phase as Constellation takes minority stake

The Atlanta, Georgia-based national wealth firm revealed its new PE partner as prior backers Wealth Partners Capital Group and HGGC’s Aspire Holdings exited their investments.

$350M father-son duo hops from Osaic to Equitable Advisors
$350M father-son duo hops from Osaic to Equitable Advisors

The latest departures in Ohio mark another setback for the hybrid RIA, which is looking to "expanding its presence across all models and segments of the wealth management industry.”

Fresh off HPS acquisition, BlackRock inks deal for $7.3B ElmTree Funds
Fresh off HPS acquisition, BlackRock inks deal for $7.3B ElmTree Funds

The St. Louis-based real estate investment firm gives the asset management giant a valuable access point to the roughly $1 trillion net lease market.

SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees
SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees

Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.