Vanguard's ETF Poised to Overtake State Street's as World's Largest
Vanguard's Standard & Poor's 500 ETF is nearing a historic milestone: surpassing State Street Global Advisors' SPDR S&P 500 Trust as the world's largest exchange-traded fund.
Data from FactSet and LSEG indicates that Vanguard's ETF held $631.8 billion in assets as of late Friday, closing in on SPDR's $633.1 billion. The gap between the two has steadily narrowed in recent months.
Analysts at Citi Research reported significant outflows from SPDR in January, accounting for 25.7% of all U.S. equity ETF outflows. Meanwhile, Vanguard's ETF attracted 12.9% of all inflows, totaling $21.3 billion.
Launched in 2010, Vanguard's ETF has gained popularity among financial advisors and retail investors due to its lower fees and cost-conscious approach.
"SPY's shift towards being a trading vehicle has increased its flow volatility," said Ryan Jackson, senior analyst at Morningstar.
Competition in the ETF market has intensified, with BlackRock, Vanguard, and State Street facing challenges from newer entrants.
State Street executive Anna Paglia emphasizes the broader ecosystem, which includes the retail-focused SPDR Portfolio S&P 500 ETF, which has also seen strong inflows.
According to VettaFi research, Vanguard's ETF may have already overtaken SPDR as the largest global ETF. "State Street remains a dominant player, but these are distinct products," said Todd Rosenbluth, head of research at VettaFi.