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.

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.

Market Concentration: US vs. Europe

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.

Top 10 Firms by Assets in ETFs

Although most ETFs on the market were “born that way,” it has become more common for asset managers to convert open-end funds to ETFs in recent years. Nearly 90 of these conversions took place between March 2021 and September 2024. Dimensional is one such shop that converted seven of its mutual funds to ETFs between mid-2021 and mid-2022. All seven were tax-managed mutual funds aimed at taxable accounts, so switching to a more tax-efficient vehicle made sense.

Active Managers Turn Their Attention to Alternative Funds

Many asset managers have focused their attention on private assets offered through vehicles other than open-end mutual funds and ETFs, but some firms have seen success growing their alternative fund offerings. BlackRock boasts the largest alternative fund AUM in the US, though its USD 37 billion represents just 1.1% of its total fund AUM. More than half of that is in iShares Bitcoin Trust ETF, which BlackRock launched only in January 2024.

Top 10 Firms by Assets in Alternative 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.

Gold, Silver, and Bronze Morningstar Medalist Ratings Among the 10 Largest Firms

At eight of the 10 largest firms, more than 90% of fund assets are invested in share classes with Gold, Silver, or Bronze Medalist Ratings. This is impressive considering that, on average within the 150 largest firms, less than 60% of assets are in higher-rated share classes. Moreover, in the case of Vanguard and T. Rowe Price, this isn’t just a case of investors buying into higher-rated funds. Rather, 98% and 93% of funds offered by Vanguard and T. Rowe Price, respectively, merit higher Medalist Ratings. Both High-rated Parent firms, these managers take care to shore up all their strategies, not just the largest ones.

Women Are Underrepresented in Portfolio Management

Women account for well less than half of named portfolio managers at most of the largest firms in the US. The two exceptions are Community Capital, which runs two sustainable strategies focused on direct impact in areas like affordable housing, and ARK, where well-known founder, CEO, and portfolio manager Cathie Wood is one of just two named managers.

Firms by Percentage of Female Portfolio Managers

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.