Home ETF Stats ETF Issuers…Good Luck!

ETF Issuers…Good Luck!

If you’re an ETF issuing company or thinking about creating an ETF let me just say, Good Luck!

Let me qualify my sentiment and the image above, that looks like a roulette table in my opinion, by sharing with you some ETF AUM data. In our ETF Stats – Food for Thought post you’ll note that 98% of ETF AUM is owned by 20 ETF issuing companies. The top 2 companies which are Blackrock and Vanguard own 65% of ETF AUM. As of May 5th, 2020 total ETF AUM for all issuing companies was $3.9T. Let’s these key stats sink in and I hope you can see where I’m going with this to explain my sentiment.

Now let’s dig into Vanguard for a bit. Vanguard has been in the investment world for over 40 years. They have a large team of sales and marketing professionals that have helped them accumulate a large amount of assets over time. Per Wikipedia it looks like Vanguard has just under 17,000 employees and over $6 Trillion in assets as of 1/31/2020. They are huge needless to say, but the point we need to truly understand is that they have a large sales and marketing team to help them distribute their product that smaller and newer ETF issuing companies don’t.

Here’s a newer ETF issuing company’s profile over the past 10 years. What you’ll typically find in a newer ETF issuing company are a few employees. You’ll find a portfolio manager and his/her’s PM assistant, the backer/CEO, and if they’re lucky they’ll have one maybe two licensed sales reps/wholesalers. That’s it. These newer ETF players are good at creating portfolio solutions…net selling and distributing.

So back to my comment, “Good Luck”. If you’re an ETF issuer and/or thinking of launching a new ETF it will be a gamble and a money drain. Especially if you don’t have a solid business development plan and team to help grow your AUM. Vanguard and Blackrock have thousands of employees selling their product and chances are you’ll probably have none to maybe 1 or 2 licensed sales reps pushing your product. So good luck selecting the right number or color on the roulette table. You might have a better chance wining going to Vegas.

But it’s not all doom and gloom for the tiny ones; there’s hope but it will still be a hard and difficult road. There are automated marketing and business development solutions out there that make a small company seem like a large company. If you’re a newer ETF Issuer or thinking of launching a new ETF, reach out to us at info@newetfs.io. We have a team of partners that can help you develop a business development process to grow AUM and also launch your ETF. We want to help “the other 10%” as much as possible.