State Street Relinquishes Title of Biggest ETF Provider to Vanguard

Vanguard has surpassed State Street as the largest ETF provider in the US, according to Statista. As of October 2024, Vanguard held a market share of almost 31 percent, while State Street had 13.5 percent. This shift in market leadership reflects Vanguard's strategic moves and the evolving preferences of investors.

Vanguard's rise to the top can be attributed to several factors:

1. Expanding ETF offerings: Vanguard has expanded its ETF lineup, introducing a wide range of products across various asset classes and investment styles. As of 2025, Vanguard has 90 ETFs listed with a total of 3.15 trillion in assets under management, with an average expense ratio of 0.08%.
2. Lower fees: Vanguard is known for its low-cost structure, which attracts investors seeking affordable investment options. By keeping fees low, Vanguard can attract a larger number of investors, leading to increased assets under management.
3. Innovation with ESG and thematic ETFs: Vanguard has been at the forefront of offering ESG and thematic ETFs, which cater to the growing demand for socially responsible and targeted investment strategies. This innovation has helped Vanguard gain a competitive edge in the market.

State Street, in response to Vanguard's growth, has taken the following steps to maintain its position in the ETF market:

1. Expanding ETF lineup: State Street has also expanded its ETF offerings, with 158 ETFs listed and a total of 1.56 trillion in assets under management. The average expense ratio for State Street's ETFs is 0.27%.
2. Focusing on institutional investors: State Street has maintained a strong presence in the institutional investor market, catering to the needs of pension funds, endowments, and other large-scale investors. This focus has helped State Street maintain a significant market share in the ETF industry.
3. Partnering with other asset managers: State Street has formed partnerships with other asset managers to create and distribute ETFs, allowing it to leverage the expertise and resources of its partners while expanding its ETF offerings.

The market dynamics and investor preferences have evolved to favor Vanguard's approach to ETFs, with investors increasingly seeking low-cost, innovative, and socially responsible investment options. Other asset managers can learn from Vanguard's success by focusing on low costs, expanding their ETF product suites, and innovating with ESG and thematic ETFs to cater to the growing demand for these investment strategies.

In conclusion, Vanguard's rise to the top of the ETF landscape can be attributed to its strategic moves, including expanding its ETF offerings, maintaining low fees, and innovating with ESG and thematic ETFs. State Street has responded by expanding its ETF lineup, focusing on institutional investors, and partnering with other asset managers. As the ETF market continues to grow and evolve, investors will likely continue to seek low-cost, innovative, and socially responsible investment options, driving further competition and innovation among ETF providers.