VOO and IVV Chasing SPY for the ETF AUM Crown

Now we have talked concerning the progress of exchange-traded funds (ETFs) and the recognition of those merchandise amongst retail merchants. 

Right this moment, we concentrate on the expansion of ETFs monitoring the S&P 500.  

Not too long ago, Vanguard’s VOO handed State Avenue’s SPY, making it the most important of the S&P 500 ETFs. Though information reveals SPY nonetheless leads in different classes. After which there’s Blackrock’s IVV, which isn’t far behind. 

VOO took the lead in S&P 500 ETF belongings below administration (AUM)

Since 2010, AUM-tracking S&P 500 ETFs have grown from $88 billion to over $1.8 trillion. Being the oldest U.S. ETF, State Avenue’s (SPY) ETF began with the bulk (76%) of S&P 500 belongings. 

Nonetheless, because the chart under reveals, competing ETFs from Vanguard (VOO) and Blackrock (IVV) are catching up. In actual fact, VOO just lately handed SPY in belongings. 

Chart 1: VOO and IVV are each placing strain on AUM chief SPY

The rise in recognition of VOO and IVV could also be helped by their holding prices, that are lower than 1/3 the price of SPY.  

IVV and VOO Inflows haven’t come from retail

As a way to catch up, VOO and IVV have captured the lion share of internet ETF inflows (creations) since 2017. In complete, these three ETFs have seen internet creations of round $643 billion since 2017, with 54% of these going into VOO.

Nonetheless, utilizing the identical information we use for our retail buying and selling updates, we see that surprisingly, SPY had essentially the most retail inflows. In actual fact, SPY has added $52 billion in AUM from retail because the starting of 2017, greater than the mixed internet new retail belongings gained by VOO, IVV and SPLG over the identical interval. 

That implies that different kinds of buyers have been contributing to holdings will increase of IVV and VOO, and with out retail shopping for in SPY market broad flows into the ETF would truly be damaging, as evidenced by retail internet flows being 127.6% of the overall fund flows, additional implying non-retail buyers have been shifting extra belongings into IVV and VOO.

Chart 2: Nearly 128% of internet new AUM in SPY have come from retail buyers since 2017

SPY stays by far essentially the most liquid S&P 500 ETF

There may be one class that SPY nonetheless dominates: Liquidity.

SPY trades over $28 billion every day — greater than 10-times each IVV and VOO.

Apparently, though retail buyers like shopping for ETFs, their buying and selling pales compared to market-wide liquidity in these merchandise (inexperienced bars in Chart 3). Retail buying and selling can be nonetheless targeted on SPY, accounting for practically 80% of all retail worth traded in S&P 500 ETFs.

Chart 3: SPY has represented 89% of {dollars} traded by S&P 500 ETFs from 2017 onwards

State Avenue would possibly nonetheless be capable of lay declare to the asset crown

Importantly, these usually are not the one S&P 500 ETFs within the U.S. market. 

In actual fact, State Avenue launched one other S&P 500 ETF (SPLG) in 2017, which has garnered $58 billion of its personal belongings (and carries a decrease administration payment like IVV and VOO).

Placing these collectively, State Avenue would nonetheless be capable of lay declare to the S&P 500 ETF asset crown – not less than for now.