Vanguard Nears the Crown: VOO Poised to Overtake SPY as the World's Largest ETF
In an unprecedented surge, Vanguard Group Inc. has amassed a staggering $18 billion in inflows into its S&P 500 ETF (VOO) since the start of 2025. This extraordinary influx eclipses that of its closest competitor by a factor of five. Moreover, VOO's total assets have reached $626 billion, placing it on the cusp of surpassing the $637 billion SPDR S&P 500 ETF Trust (SPY), currently the world's largest ETF.
VOO's ascendancy stems from its appeal to cost-conscious financial advisors and retail investors, who prioritize long-term investment horizons and seek consistent returns. Vanguard's ultra-low fees have garnered a loyal following among buy-and-hold investors, as its unique corporate structure allows its products to offer significantly reduced expenses.
In contrast, SPY remains the preferred choice of professional traders, valued for its liquidity and narrow spreads. However, its higher fee of 0.095% compared to VOO's 0.03% has contributed to its higher trading volume and occasional net outflows.
Vanguard's dominance in the retail market underscores the significance of its model portfolios, which package funds into comprehensive investment strategies for advisors. This innovative approach has tapped into a growing demand for diversified, low-cost, and highly liquid ETFs like VOO.
While VOO leads the race to overtake SPY, BlackRock Inc. looms as a formidable challenger. Its $610 billion iShares Core S&P 500 ETF (IVV) has also experienced significant growth, absorbing nearly $87 billion in the past year alone. Industry analysts speculate that BlackRock may adjust IVV's fee structure to match that of VOO in an effort to gain further market share.
As the ETF market continues to expand, the battle for supremacy will undoubtedly intensify. VOO's current dominance, however, reflects its unwavering focus on cost efficiency and the trust it has earned among investors seeking long-term growth.