By Paul R. La Monica
Vanguard's S&P 500 exchange-traded fund -- so popular that it's known simply by its ticker symbol VOO -- just topped $1 trillion in assets, the first ETF to mark that milestone.
VOO officially crossed the line on Tuesday, Vanguard said .
"This milestone represents $1 trillion of trust and disciplined investing -- the fund's growth is an outcome, not an objective," the company said. "Investors' conviction in a simple and powerful idea demonstrates the power of indexing."
The ETF's rivals from BlackRock and State Street have some catching up to do. BlackRock's iShares Core S&P 500 ETF has $859 billion in assets under management and the State Street SPDR S&P 500 ETF, the first U.S. ETF to debut back in 1993, has $785 billion, according to ETF Database.
So why has VOO captured such a big lead? After all, these funds all invest in the same stocks in the S&P 500. And there is no edge from managers actively picking winners.
Well, three big things aligned to put VOO, launched in 2010, in the 12-zero zone: the hot stock market, low fees, and its easy way to reinvest dividends.
First, the fees. VOO charges an expense ratio of 0.03% vs. 0.09% for State Street. The iShares index fund, which began trading in 2000, also charges 0.03%.
The lower expenses save investors big bucks since the annual fees for VOO -- and iShares -- are a third of what State Street charges.
At Interactive Brokers, VOO's low fees are its main selling point.
"Our customers, who tend to be fee-sensitive, gravitate to VOO when they view market dips as longer term buying opportunities," said Steve Sosnick, Interactive Brokers' chief strategist.
And State Street's fund "is extremely popular among active traders, especially those who trade its hyper-liquid options," he said.
The market surge is an easy one to understand. The S&P 500 seems to just keep setting record highs. The index has already added nearly 11% this year.
Finally, those dividends. VOO and iShares make it much easier than State Street to reinvest dividends. State Street's fund is technically set up as an unit investment trust, which pays dividends quarterly. VOO and iShares has plans that automatically invest their payouts.
Taking the long view, Vanguard's history as a leading provider of mutual funds, particularly index funds, has allowed it to gain the edge over BlackRock and State Street. Legendary investor John Bogle founded Vanguard in 1975.
"Vanguard has been able to edge out BlackRock in this race because of their brand and structure. They have been known as the low-cost provider for 50 years now," said Eric Balchunas, senior ETF analyst with Bloomberg Intelligence.
To be sure, all the funds should attract more interest very soon because of the SpaceX initial public offering, which is expected next week. Elon Musk's space company could get added to the S&P 500 much more quickly than its mega IPO predecessors.
VOO holds the $1 trillion record, but Vanguard has four other of the 10 largest ETFs ranked by assets under management: Vanguard Total Stock Market ETF, Vanguard Growth ETF, Vanguard FTSE Developed Markets ETF, and Vanguard Value ETF.
Vanguard has made a splash in fixed-income funds, too. Its Vanguard Total Bond Market ETF is the biggest bond ETF and 11th largest overall, with $157 billion in assets.
The VOO record. The biggest bond fund ETF. Vanguard isn't just a top mutual fund provider. It's the king of ETFs, too.
Write to Paul R. La Monica at paul.lamonica@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 03, 2026 14:57 ET (18:57 GMT)
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