The Top US Fund Families in 5 Charts
It’s back! After a five-year hiatus, Morningstar’s Fund Family 150 Digest is back to help investors evaluate the largest fund families in the US. The 2024 edition illustrates the ways the asset-management industry is evolving through topics like exchange-traded fund exposure, alternative fund offerings, and women portfolio managers. It also features classic due diligence considerations like Morningstar’s Medalist Rating, the Morningstar Rating, and fees.
This report features an abundance of Morningstar’s data, ratings, and commentary.
Get the full report: Fund Family Digest — US in 2024
For those interested in European fund families download the European Fund Family 100 Digest here.
The Five Largest US Firms Command a Strong Lead
Through the end of August, the top three firms, Vanguard, BlackRock, and Fidelity, make up 51% of fund assets under management in the US. Capital Group, mostly through its American Funds lineup, oversees an additional 8% of AUM. Overall, the largest five firms soak up a whopping 63% of AUM, which means the next 145 take up only 37% of AUM. This level of concentration among top players has risen over the past 10 years. In August 2014, the top four firms—Vanguard, Capital Group, Fidelity, and BlackRock—together accounted for 43% of fund assets under management in the US.
Source: Morningstar. Data as of Aug. 31, 2024. Includes US and Europe-domiciled open-end and exchange-traded funds. Excludes funds of funds, feeder funds, and money market funds.
Europe’s five largest fund families, which include BlackRock as the top dog with 15% of AUM and Vanguard with a smaller 4% slice, soak up roughly half what their counterparts in the US do. Regardless, besides a handful of asset managers that dominate the fund and ETF landscape, both the US and Europe are quite fragmented. While the industry heavyweights certainly have room to fall, that’s left many large active managers battling for basis points in terms of market share.
Passive Managers Top the List of ETF Providers, but Index Funds Aren’t the Only Game in Town
All but two of the top 10 firms for ETF assets have large passive businesses. State Street debuted the first US ETF in 1993 and remains one of the largest providers of passive ETFs today. However, ETFs are no longer relegated to passive index-tracking strategies. Over the past few years, active ETFs have taken the asset-management industry by storm. J.P. Morgan dominated the flows landscape with one such offering: JPMorgan Equity Premium Income ETF. Launched less than five years ago, the fund spearheaded the rise of covered-call ETFs, and its USD 35 billion in assets make up nearly one fifth of JPMorgan’s entire ETF business, as of August.
Source: Morningstar Direct Asset Flows. Data as of Aug. 31, 2024. Includes US-domiciled exchange-traded funds. Excludes funds of funds, feeder funds, and money market funds.
Most of JPMorgan’s alternative fund AUM is in five options-trading strategies. Calamos Market Neutral Income comprises all of Calamos’ alternative AUM; that fund was one of the very first of its kind, having launched in September 1990 and drawing on the firm’s expertise in convertible bonds.
Vanguard, Capital Group, and T. Rowe Price Take the Podium for Morningstar Medalist Ratings
Among funds offered by the 10 largest firms in the US, investors have a plethora of promising options, and strategies from Vanguard, Capital Group, and T. Rowe Price lead the pack.
Morningstar assigns forward-looking Morningstar Medalist Ratings to convey the manager research team’s confidence in a strategy’s ability to outperform its category index after fees. Ratings range from Gold to Negative, and funds rated Gold, Silver, and Bronze are all expected to outperform. The exhibit below shows the percentage of each firm’s fund offerings that earn higher ratings under the Medalist Rating framework.
Source: Morningstar. Data as of Aug. 31, 2024. Includes US-domiciled open-end and exchange-traded funds. Excludes funds of funds, feeder funds, and money market funds.
Baillie Gifford is another firm with relatively strong representation of women, where nearly one third of managers named on US-domiciled funds are female. Moreover, at least one fund—Baillie Gifford Health Innovation Equities—is run by an all-female squad. Julia Angeles, Rose Nguyen, and Marina Record started on this fund at its inception in 2021.
Download the full US Fund Family Digest here and the full European Fund Family Digest here.
