When investors look at ETFs it is difficult to come to a measurement that defines the ‘top’ ETFs in terms of performance.
ETFs – exchange traded funds – are designed in their basic form to track a stock market index. If they are doing their job properly, they are mirroring the performance of that index as closely as possible.
But if we look at the European ETF landscape in terms of its size, then the top ETFs become a little clearer. These are the big boys, the ETFs favoured by the pro investors like pension fund managers and insurance company asset allocators. They are also a good reflection of which ETFs private investors should be looking at initially for their investment portfolios.
Based on the ETFs listed on the Lipper fund database at the end of March, there were only 162 European ETFs which held more than EUR 1 billion in assets under management. These 162 funds also accounted for 60% of the total assets under management in the European ETF industry.
The Top 10 ETFs in Europe
Here is the list of the top 10 ETFs in Europe based on their sheer size, according to data provider Refinitiv:
- iShares Core S&P 500 UCITS (Acc)
- Vanguard S&P 500 UCITS (Acc)
- iShares Core MSCI World UCITS ETF (Acc)
- iShares Core MSCI EM UCITS ETF (Acc)
- iShares Core Corp Bond UCITS ETF (Dist)
- iShares JP Morgan EM Local Gov Bond UCITS ETF
- iShares Core S&P 500 UCITS ETF (Dist)
- iShares Core FTSE 100 UCITS ETF GBP (Dist)
- iShares JP Morgan Dollar EM Bond UCITS ETF (Dist)
- iShares DAX UCITS ETF
Predictably all but one of these ETFs are managed by the giant iShares ETF shop. All the ETFs on the list have, at minimum, EUR 5 billion in assets under management.
But the composition of the lists is also interesting: it shows how investors are using ETFs to replicate the performance of the S&P 500 index for the most part, with a FTSE 100 and a DAX ETF also being favoured.
ETFs are a good way to mirror market performance without having to buy the underlying shares. Large ETFs like this are also very liquid, meaning that you can buy and sell them relatively easily. ETF fees are also going to be close to all time lows, thanks to fierce competition in the industry.
The list also demonstrates how some investors are using ETFs to access markets where they might now have the in-house expertise, like emerging market local government bonds (iShares JP Morgan EM Local Gov Bond). This ETF follows an index calculated by US bank JP Morgan which follows the performance of government bonds in countries like South Africa, Brazil or Mexico. This is not a market many investors will want to be investing in directly, but will still be interested in.