Stocks at record highs, SPY becomes first ETF to surpass $600 billion in assets
Flag of the United States hanging across the New York Stock Exchange building on Wall Street
The SPDR S&P 500 ETF Trust (SPY) has reached a significant milestone, becoming the first exchange-traded fund (ETF) to surpass $600 billion in assets under management (AUM). Currently managing $600.86 billion, this achievement reflects not only the ETF's enduring popularity but also the broader surge in stock market performance.
SPY, launched in January 1993 as the first U.S. ETF, tracks the S&P 500 index. Its year-to-date returns stand at 23.1%, with a one-year return of 39.1%, highlighting its robust performance amidst a strong market. Over the past month, the fund has added $22 billion in assets.
“This milestone underscores the enormous stock market gains this year,” remarked Sumit Roy, Senior Analyst at etf.com. However, despite recent inflows, SPY has faced growing competition from its peers. It has experienced $5.7 billion in net outflows year-to-date, losing ground to rival funds like Vanguard S&P 500 ETF (VOO) and iShares Core S&P 500 ETF (IVV).
Five year price chart of the SPY ETF on Google Finance
Rising Competition
VOO and IVV have gained traction with investors due to their lower expense ratios of 0.03%, compared to SPY’s 0.09%. VOO now manages $540.9 billion after netting $77.8 billion in inflows this year, while IVV holds $544.5 billion after attracting $51.9 billion. Both funds are projected to surpass SPY in AUM within the next year, according to Roy.
Despite this competition, SPY retains its edge in liquidity, trading an average of $23 billion daily. This liquidity makes it a favored choice among institutional investors and traders. However, as rivals close the gap, this could mark the last major AUM milestone SPY achieves ahead of its competitors.
SPY’s legacy as a trailblazer in the ETF space is undeniable, but the evolving preferences of long-term investors signal an increasingly competitive landscape for passive investment products.
