‘VOO and Chill’ Pushes Vanguard S&P 500 ETF Toward Record $1T

You can just about call VOO the Michael Jordan of the ETF industry. 

The Vanguard S&P 500 ETF (VOO) is nearing $1 trillion in assets, a threshold no ETF has crossed. The fund, which gives investors exposure to 500 of the largest US companies with an expense ratio of just 3 basis points, became the largest ETF on the market last year when it surpassed the SPDR S&P 500 ETF Trust (SPY). It has since garnered a massive lead: VOO’s AUM is around $980.7 billion, while SPY sits closer to $775.1 billion, according to data from VettaFi as of Friday. 

“VOO crossing the $1 trillion mark will be a tremendous milestone for the ETF industry,” said Todd Rosenbluth, head of research and editorial at TMX VettaFi. “The low-cost S&P 500 index ETF has become the starting point for many advisors and investors building asset allocation strategies.” 

Baller Bet

ETFs have surged in popularity lately, thanks to their ability to give investors diversification and broad exposure at low costs in an easy-to-use wrapper. Vanguard’s fund exemplifies the benefits, with “VOO and chill” becoming a popular investment strategy for everyday investors. Reaching the $1 trillion mark is likely to encourage more investors to embrace the ETF structure, Rosenbluth says. And the milestone wouldn’t be a milestone only for VOO, but for the ETF industry as a whole: 

• “It confirms the dominance of ETFs as investors’ preferred investment vehicle over mutual funds,” said Seth Hickle, chief investment officer at Mindset Wealth Management. “This milestone also shows the growing institutionalization of passive investing as investors pour money into broad-based market exposure rather than trying to pick individual winners.” 
• VOO being so close to crossing that $1 trillion line also shows a lot of trust in Vanguard. It’s “a testament to their goal of providing transparent low-cost market exposure that is simple, efficient and easy to understand,” Hickle added. 

Game Time: A pullback from the stock market, which is balancing momentum from strong corporate profits and interest in AI with worries about geopolitical tensions and inflation, could mean we have to wait a bit longer. But VOO’s $1 trillion slam dunk certainly is within reach.