SPDR S&P 500 ETF Trust — the very first ETF, which is still best known by its symbol SPY — is on track to lose its position as the world's largest ETF.
The Vanguard S&P 500 ETF, a relative whippersnapper that launched 17 years after SPY's 1993 debut, now holds assets worth $584.1 billion, says Morningstar Direct. That's less than $42 billion — or 7% — behind SPY.
And based on the rapid clip at which Vanguard S&P 500 is growing, passing up SPY looks increasingly likely in 2025. VOO hauled in $103 billion in assets this year as of Nov. 22, easily surpassing the $4.2 billion that flowed into SPY, says Todd Rosenbluth, head of research at TMX Vetta Fi.
Even famed investor Warren Buffett owns a big chunk of Vanguard S&P 500 in addition to SPDR S&P 500 ETF Trust in the Berkshire Hathaway portfolio. Another S&P 500 ETF, iShares Core S&P 500, is also gaining fast. It now holds $569.2 billion in assets.
"It is likely a matter of time before VOO and IVV pass SPY in assets under management," Rosenbluth said.
Battle For S&P 500 ETFs Continues
Giant ETF providers continue to slug it out over S&P 500 funds. Dozens of versions of funds investing in the world's most-popular S&P 500 stock index are available.
Investors are increasingly turning to index funds that passively buy baskets of stocks — over active mutual funds that try to pick stocks. But in passive investing, low fees are one of the only ways to differentiate from the competition.
And Vanguard S&P 500 charges just 0.03% annually to the 0.095% charged by SPDR S&P 500 ETF Trust. That might seem like a small difference. But the S&P 500 portion of portfolios tends to be a large slice. And on a $500,000 position, the difference in fees is $325 in just the first year.
The shift isn't completely a surprise. State Street Global Advisors, the firm behind the SPDR family of funds, launched its own lower-cost competitor to SPY in 2005: SPDR Portfolio S&P 500. This ETF charges just 0.02% annually — even less than VOO.
"SPY charges a higher net expense ratio than IVV, SPLG and VOO," Rosenbluth said. "Strategic investors, both institutions and retail investors, focus more on the annual fee for holding an ETF than the trading volume of an ETF."
Competition Is Good For S&P 500 Investors
SPLG is gaining some traction, too. SPDR Portfolio S&P 500 lured in $18 billion this year, Rosenbluth says. The ETF also attempts to pay quarterly dividends a few days before the end of the quarter, which some investors might find appealing. But SPLG's assets are only at $52.6 billion, still miles behind SPY and VOO.
Meanwhile, SPY remains in a class of its own when it comes to the amount of buying and selling. Its daily average volume is 46.5 million, or 730% higher than Vanguard's S&P 500 ETF. That's appealing for some very large investors who prize liquidity above all else.
"SPY has accounted for roughly 20% of the U.S. ETF trading volume and trades more than Apple and many other securities," Rosenbluth said. SPY will remain a "go-to ETF" for many for this reason.
But one thing's for sure: ETFs' role in portfolios is large and growing. "The success of SPY's competitors, including its own sister fund SPLG, is a positive sign for the industry," Rosenbluth said. "We believe as investors have a positive experience using ETFs they are likely to own more of them." And SPY will always be the first.
Largest ETFs
Vanguard S&P 500 is making a run to be the largest ETF.
| Name | Ticker | Net assets (billions) | Inception date | Expense ratio |
|---|---|---|---|---|
| SPDR S&P 500 ETF Trust | SPY | $625.7 | 1/22/1993 | 0.095% |
| Vanguard S&P 500 | VOO | 584.1 | 9/7/2010 | 0.03% |
| iShares Core S&P 500 | IVV | 569.2 | 5/15/2000 | 0.03% |
| Vanguard Total Stock Market | VTI | 464.7 | 5/24/2001 | 0.03% |
| Invesco QQQ Trust | QQQ | 312.2 | 3/10/1999 | 0.20% |
| Vanguard Growth | VUG | 151.5 | 1/26/2004 | 0.04% |
| Vanguard FTSE Developed Markets | VEA | 136.5 | 7/20/2007 | 0.06% |
| Vanguard Value | VTV | 135.2 | 1/26/2004 | 0.04% |
| Vanguard Total Bond Market | BND | 120.3 | 4/3/2007 | 0.03% |
| iShares Core US Aggregate Bond | AGG | 120.0 | 9/22/2003 | 0.03% |
