BlackRock’s iShares retains top position in Europe

BlackRock has retained its position as the dominant ETF player in Europe with its iShares range, leaving rival Vanguard far behind in the rankings, Morningstar data shows.

As of December, iShares has €253bn (£215bn) assets covering almost half of the ETF European market share.

ETF providers db X-trackers, Lyxor, UBS ETFs, Amundi ETF and Vanguard follow iShares in Morningstar’s list of the biggest players in Europe, with combined assets of less than €200bn.

In its 2017 report on the Eurpean ETF market, ‘A Guided Tour of the European ETF Marketplace’, Morningstar found assets under management in strategic-beta ETFs have quadrupled in the past four years, landing at €43bn (£37bn) as at the end of 2016.

The report shows value and minimum volatility were the most common equity factor exposures but suggests multifactor ETFs will gain more prominence in the future.

Elsewhere, data shows assets under management in European-domiciled ETFs doubled over the past five years to €550bn at the end of December 2016.

The report also shows a significant increase in the shift from synthetic to physical replication ETFs, with assets in physically replicated exchange-traded products now representing 77 per cent of the market, up from 66 per cent three years ago.

Morningstar director of passive funds research Hortense Bioy says: “The European ETF marketplace has seen tremendous growth in recent years, with expansion in the number of strategies on offer.

“Despite talk of consolidation, the number of providers and products is still rising. Strategic or ‘smart’ beta, environmental, social and governance and thematic exposures are areas of focus for new product development, and as the product menu further broadens, so does complexity. This calls for renewed education efforts for professional and retail investors.”