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VOO Becomes First ETF to Top $700 Billion in Assets

The development illustrates Vanguard’s ongoing dominance in ETFs as well as client demand for low-cost, passive strategies. 

The Vanguard logo on a phone.
Photo via Thomas Fuller/ZUMAPRESS/Newscom

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If there’s one thing investment strategies and ice cream have in common, it’s that Americans prefer vanilla.

Vanguard’s S&P 500 ETF (VOO) last week became the first ETF to top $700 billion in assets under management, just months after dethroning State Street’s SPDR S&P 500 ETF Trust (SPY) as the largest ETF in the world. The milestone underscores Vanguard’s dominance in the ETF market and client preference for simple, low-cost, passive strategies.

“A lot more people have gotten the message that fees matter,” said Dan Sotiroff, Morningstar research analyst. “Active management in the US large cap space is hard to do, and it’s even more difficult to do consistently, so they’re just opting to buy a low-cost index fund.”

Va-Va-VOOm

So far in 2025, VOO is up roughly 10%, trading around $590 per share. In the same period, it has taken in nearly $79 billion in flows, according to VettaFi data. Despite macroeconomic uncertainty and worries about overvaluation, clients continue to believe in large-cap US equities, said Cinthia Murphy, VettaFi investment strategist. “They are staying invested and increasing that investment throughout the turbulence, and the market continues to deliver on the upside,” she told Advisor Upside.

Eh, Don’t Risk It. Whether it’s crypto, private equity or hedge funds, there’s a lot of hype about clients having a growing appetite for risk. Just last week, President Donald Trump signed an executive order expanding access to alternatives in 401(k)s that backers say caters to mass affluent clients who want riskier opportunities with potentially higher yields in their retirement accounts. 

Sotiroff, however, says much of the hype is coming from the industry itself rather than reflecting actual investor demand. The Apollos and BlackRocks of the world have tapped their core audience of big institutions and endowments and are looking to expand their reach, he said. “Now, it’s all about getting those private assets into the hands of retirement accounts and small, retail investors,” he told Advisor Upside. 

Meanwhile, flows into low-risk money market mutual funds also have surged in recent years. In March, the funds reported record assets of more than $7 trillion. “Are we really in a risk-on environment when you see all that’s going into money market funds?” Sotiroff asked.

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