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Bloomberg The Vanguard Group headquarters in Malvern, Pennsylvania.
For asset managers, one old saw remains constant: the big keep getting bigger.
Now add a footnote to that idea: much of that growth is being led by exchange-traded funds.
Those insights come from the 2019 fund flows report from Morningstar, out Tuesday. Morningstar data for the year show what it calls an “oligopoly” among fund families, with Vanguard and BlackRock BLK, +1.68% handily atop the venerably ranks of asset managers.
The table below shows assets held by each company in 2019 and 2018, the net flow in 2019, and the 2019 organic growth rate, which means how much money it attracted from investors, not through acquisitions.
| Assets under management, billions, 2019 | Assets under management, billions, 2018 | Estimated net flows 2019 | Organic growth rate 2019 | |
| Vanguard | 5,958 | 4,712 | 263 | 5.6% |
| BlackRock & iShares | 3,409 | 2,704 | 298 | 11.0% |
| Fidelity | 2,889 | 2,287 | 193 | 8.4% |
| American Funds | 1,790 | 1,460 | 3 | 0.2% |
| JPMorgan | 1,116 | 942 | 95 | 10.1% |
| State Street | 886 | 703 | 28 | 4.0% |
| Invesco | 823 | 736 | -38 | -5.1% |
| T. Rowe Price | 721 | 591 | -11 | -1.9% |
| Pimco | 634 | 530 | 72 | 13.5% |
| Amundi | 580 | 534 | 15 | 2.8% |
| Source: Morningstar Direct Asset Flows, as of Dec. 31, 2019 | ||||
“It’s a reminder that as broad a universe of asset managers as there are, the assets and the flows remain quite concentrated,” said Todd Rosenbluth, head of fund research at CFRA.
See: This chart shows how Vanguard’s explosive growth has ‘taken on a life of its own’
Morningstar’s data show that BlackRock unseated Vanguard last year for the first time since 2013 in terms of inflows — though not by a lot. But Vanguard is still the granddaddy of overall assets under management, with a whopping 75% more than BlackRock, and more than double the money held by No. 3 Fidelity.
The share of assets among the top 10 companies held by the top two has been fairly constant year to year: BlackRock and Vanguard had 49% of those assets in 2018 and 50% in 2019.
BlackRock’s impressive showing in 2019 shows how it “benefitted from growing demand for index-based strategies, in particular ETF,” Rosenbluth said. In particular, it confirms growing demand for ETF products in Europe, Rosenbluth said: BlackRock is “by far the industry leader” globally, while Vanguard has a dominant position in the U.S.
A similar dynamic may be behind the heady organic growth rate for Pimco: it’s No. 9 in terms of assets but enjoyed the strongest pace of growth in 2019, in large part because of its experience as a manager of active fixed-income ETFs.
In fact, investor demand for bond ETFs has been so strong that BlackRock’s iShares’ domestic fixed-income haul in 2019 was $14 billion, “easily offset net withdrawals from its allocation and equity funds,” Morningstar noted.
Read: Investors can’t get enough bond funds
And: ETFs make the bond market safer, bank analysts say. No kidding, say ETF analysts.
