The new ETF king

Step aside, Larry Fink. For the first time in more than two decades, BlackRock has been dethroned as the ETF industry’s largest player. Vanguard now wears the crown, managing roughly $4.39 trillion in ETF assets and attracting $291 billion in net inflows this year—about $100 billion more than its rival.

The changing of the guard was made possible by Vanguard’s flagship S&P 500 ETF, which became the first ETF ever to surpass $1 trillion in assets last week as investors piled into US stocks during recent market volatility.

The victory also validates Vanguard’s deliberately simple strategy. While BlackRock offers nearly 480 US-listed ETFs spanning everything from private credit to crypto, Vanguard has just 116, largely focused on ultra-low-cost index funds tied to stocks and bonds.

The ETF buffet

The ETF industry looks very different now compared to when BlackRock first rose to the top. Today, investors can buy funds tied to AI, crypto, and even UFO disclosure theories. And with the World Cup underway, there’s a whole menu of ways to turn soccer into an investment thesis, from host-country funds to sports-betting plays.

But here’s the thing about the ever-expanding buffet: Almost no one is eating from most of it. The vast majority of assets still sit with just Vanguard, BlackRock, and State Street. Not to mention, Vanguard took the crown with the simplest menu of the three. It’s a good reminder that despite endless ETF flavors, most investors still order vanilla.—SY