The Individual Investor’s Guide to Exchange-Traded Funds 2014

The exchange-traded fund ETF industry continues to grow, and signs point to further expansion.

As of June 30, 2014, $1.86 trillion was managed by exchange-traded funds and exchange-traded notes ETNs. In contrast, a year prior, total assets under management were $1.44 trillion. In terms of the number of offerings, there are now 1,613 ETFs and ETNs versus 1,479 a year prior. (To simplify the discussion here, we use the term ETFs to encompass ETFs and ETNs.)

Even with the growth, the vast majority of investment dollars are under the control of just a handful of ETF families. Nearly one out of every two ETF dollars is placed with an iShares fund. (The iShares family is owned by BlackRock.) More impressively, iShares’ $718.4 billion assets under management AUM, as of June 30, 2014, excludes dollars invested in other exchange-traded funds that BlackRock subadvises, such as Fidelity’s. SPDR State Street Global Advisors ranks second with $402.9 billion in AUM. SPDR S&P 500 SPY, the very first exchange-traded fund and still the largest, accounts for more than 40% of SPDR State Street’s total AUM. Vanguard ranks third among the fund families with $384.0 billion in AUM. Combined, more than

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