Step aside SPDR S&P 500 ETF Trust — there's a new king in the ETF world.
As expected, the Vanguard S&P 500 ETF saw its net assets under management hit $633.8 billion on Feb. 18, says Morningstar Direct. That makes VOO the world's largest ETF, passing up the oldest and previously largest ETF for decades, known best by its symbol: SPY. SPDR S&P 500 ETF Trust has assets of $632.0 billion.
The change-up in the largest fund represents a coming of age of the ETF market. Newer funds are catching on with investors, who are more comfortable with ETFs to hold sizable chunks of their portfolios. It's also a sign of how the prices of ETFs continue to fall — making them a smart alternative to owning individual stocks. VOO charges just 0.03% annually, nearly 70% less than the 0.095% SPY charges.
"VOO gathered a record $116 billion of net inflows in 2024 and has already added $24 billion more to start 2025," says Todd Rosenbluth, head of research for TMX Vetta Fi. "The Vanguard ETF has been gaining share as investors turn to ETFs."
What's Driving The Turnaround?
Money continues to pour out of traditional mutual funds and into mostly ETFs that invest their money based on indexes of stocks. Much of that new money is looking for a low-cost, indexed home. And Vanguard's VOO ETF fits the bill.
Investors yanked an astounding $478 billion out of actively managed funds in the past year, says Morningstar Direct. And $51.8 billion has come out of active funds in just the past month. It seems like investors finally got the memo that using high-priced funds that hire money managers to pick stocks is nearly always a bad move.
And when looking for a place to put the money coming out of mutual funds, fees matter. And here, Vanguard's massive size gives it an edge. Just this month the ETF provider slashed fees on many of its ETFs. VOO is already a low-cost leader for S&P 500 ETFs.
"Some investors will start their ETF journey using the largest ETF and build broader portfolios around VOO. This should further help Vanguard gain scale," Rosenbluth said.
Other Options For Owning S&P 500
But while Vanguard has pulled ahead for the biggest S&P 500 index ETF, it has plenty of competition. Not far behind is the iShares Core S&P 500 ETF, which now has assets of $610.7 billion. And like VOO, IVV only charges 0.03%.
And amazingly, the SPDR family of ETFs is undercutting Vanguard on a rival S&P 500 index fund. Its SPDR Portfolio S&P 500 ETF charges just 0.02% annually. The fund, though, is still catching up in terms of assets. Investors have invested $59.6 billion in the fund.
And for some investors, mainly large institutions that need to buy and sell massive numbers of shares at a time, SPY will still play a role, Rosenbluth says. "IVV, SPLG and VOO are all great choices for strategic investors with a long time-horizon. The fees are nearly identical," he said. "SPY remains the go-to vehicle for those short-term mind tactical investors due to its stronger liquidity."
Rampant competition for massive amounts of money flowing into ETFs is only helping investors. A $100,000 portfolio in VOO would only cost investors roughly $30 in the first year in fees. Many active funds would charge $500 or more and offer performance most likely to lag the S&P 500. And yet, SPY will long be known as the ETF that started this investor revolution.
"This is great sign for further ETF growth that other products emerge as a leader. But SPY will never be forgotten," Rosenbluth said. "Much like Babe Ruth whose records were broken, SPY will remain in the minds as a legend."
Largest ETFs: SPY Versus VOO
Vanguard's VOO passed up SPY in terms of assets
| Name | Ticker | Year-to-date return | Net assets ($ billions) | Avg. daily volume ($ millions) |
|---|---|---|---|---|
| Vanguard S&P 500 | VOO | 4.36% | $633.8 | $6.0 |
| SPDR S&P 500 ETF Trust | SPY | 4.34 | 632.0 | 46.6 |
| iShares Core S&P 500 | IVV | 4.38 | 610.7 | 6.5 |
| Vanguard Total Stock Market | VTI | 4.44 | 482.6 | 3.1 |
| Invesco QQQ Trust | QQQ | 5.50 | 339.3 | 29.6 |
| Vanguard Growth | VUG | 4.16 | 163.5 | 1.2 |
| Vanguard FTSE Developed Markets | VEA | 8.45 | 145.7 | 12.1 |
| Vanguard Value | VTV | 5.35 | 137.3 | 2.3 |
| iShares Core MSCI EAFE | IEFA | 8.86 | 128.0 | 9.1 |
| Vanguard Total Bond Market | BND | 0.81 | 123.7 | 6.7 |
