ETFs account for less than 10% of assets in the U.S. stock market, but they are playing an increasingly influential role in how stocks are priced and how assets are allocated, according to Nicholas Colas, co-founder of DataTrek Research.

“Instead of picking an active fund manager, investors from individuals to RIAs, family offices and large institutional investors now choose what we will call ‘attributes’ … geographic concentration, market cap, growth/value, sectors and other basic investment characteristics,” writes Colas in his latest market report. That shift, he adds, “represents a fundamental change in how capital allocation works in U.S. public markets.”

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To illustrate how ETFs change capital allocations and impact marginal prices, Colas studied two stocks in which ETFs held 6% of their outstanding shares — Apple and JPMorgan, whose performances are sharply different year to date. Apple shares are up about 10%; JPMorgan shares about 0.5%.

Colas compared the 20 ETFs that had the largest allocations of each. Fourteen ETFs owned both stocks; six other ETFs owned Apple and another six owned JPMorgan, and they were quite different from one another in terms of asset flows.

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Among the six ETFs owning Apple were three growth index funds, two tech sector funds and a low price-volatility fund.

Among the six ETFs owning JPMorgan were three value index funds, a financial sector fund, a price momentum fund and a dividend yield-oriented fund.

Tech sector ETFs have had flows 30% larger than financial sector ETFs so far this year, and equity growth ETFs had inflows nine times the size of those into value ETFs.

“No one factor defines stock prices,” writes Colas. “Our point, rather, is that as ETFs have multiplied they have created a stock market where investment attributes (sector, growth/value, etc.) play a growing role in setting marginal prices.”

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That could explain the growing popularity of smart beta ETFs, which account for about 10% of the almost $5 trillion in global ETF assets, according to data from First Bridge Data, a provider of ETF data and analytics to institutional investors.

BlackRock, the parent company of the world’s largest ETF sponsor, iShares, with nearly $1.4 trillion in global ETF assets, says global ETF assets could reach $6 trillion by the end of next year, up from $5 trillion currently, and $12 trillion by the end of 2023.

If that happens and assets continue to flow out of equity mutual funds and into equity ETFs — from 2009 through 2017, $930 billion left actively managed U.S. stock funds while $848 billion, according to BlackRock — then ETFs could well have even more influence in asset allocation and marginal stock prices in the future.