FYI: Over the last decade, the largest asset managers have gotten bigger and more powerful. Just five — Vanguard, BlackRock, Fidelity Investments, American Funds, and T. Rowe Price — control 55percent of the $19.3 trillion in total assets of U.S. mutual funds and exchange-traded funds.
But that concentration partly reflects the juggernauts that dominate passive investments, which are all about volume and keeping costs down. Indeed, BlackRock and Vanguard alone oversee $12 trillion in assets, if mutual funds tracked by Morningstar are included as well as institutional mandates.
A deeper dive into the data shows that competition in the U.S. asset management industry remains healthy. According to research done by Morningstar Direct for Institutional Investor, the top five active managers controlled only 22 percentof mutual fund and ETF assets as of the end of 2018. These figures have been fairly steady for at least the last five years. That’s a far cry from the 55 percent run by the top five when both active and passive are included.