Week in Review - December 5, 2023
Shakeup at ETF Shops
Welcome to this week's News Brief.
State Street, home of the oldest U.S. ETF, nabbed a new leader for its $1 trillion business line, naming the head of rival Invesco's ETF unit to the post of chief business officer. Anna Paglia joins the Boston-based firm in the newly created role as the firm's current global head of ETFs, Rory Tobin, prepares for his March retirement.
That leaves an open seat at the head of the industry's fourth-largest ETF franchise. Paglia spent about 13 years at Invesco, becoming its global ETF chief in 2020. Brian Hartigan, the firm's global head of investments, ETFs and index strategies will take Paglia's old title, global head of ETFs, index strategies, separately managed accounts and models, on an interim basis.
ETFs remain largely a scale game, with assets concentrated among a few players. In the past four years, Paglia helped oversee 104 product launches. In all, Invesco's ETF line represents about $432.7 billion across 220 products, according to VettaFi data.
State Street, meanwhile, has 136 ETFs and is the industry's third-biggest sponsor. However, it still controls less than half the $2.2 trillion in assets as the industry's No. 2, Vanguard. BlackRock, with 437 funds, is the largest provider, managing $2.5 trillion in ETF assets, according to VettaFi data.
And while Invesco has more-or-less maintained its market share since 2010, slipping one percentage point to 6%, State Street has seen its slice go from 23% in 2010 to 15% as of October, according to Morningstar data.
Maintaining share might be getting harder for the biggest players. Over the last decade, the industry has undergone massive innovation including a proliferation of approaches to indexing, explosive growth in fixed income strategies and the introduction of active management. The portion of the market controlled by those outside of the top four has grown by seven percentage points in the past decade, and that includes forays by firms like Schwab, which has $301.7 billion in ETF assets, First Trust with $144.6 billion and JPMorgan with $127.2 billion, VettaFi data shows.
And new launches from firms with old names (and big distribution muscle) are elbowing their way in, including long-time long-only holdouts like American Funds and, more recently, MFS and Macquarie.
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Chart of the Week
The total compensation of chief compliance officers has risen in recent years, but so too have the number of rules and tasks that fall to them. A look at how pay packages break down from Ignites Research shows women typically have lower base pay and larger bonuses.
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