Vanguard's VOO (VOO) Nears SPY (SPY) to Become Largest ETF Globally

Vanguard’s S&P 500 ETF (VOO) is on the verge of becoming the world’s largest exchange-traded fund, threatening to dethrone State Street’s SPDR S&P 500 ETF Trust (SPY) after decades of dominance. Nearly $18 billion has flowed into VOO in 2025 alone, bolstered by its record-breaking $116 billion in inflows last year. With assets now totaling $626 billion, VOO is within striking distance of SPY’s $637 billion, signaling a major shift in the ETF market landscape.

VOO’s ascent reflects its appeal to cost-conscious retail investors and financial advisers. Vanguard’s rock-bottom fees — just 0.03% annually compared to SPY’s 0.095% — have cemented its position among long-term investors. Unlike SPY, which sees frequent net withdrawals due to its popularity with professional traders, VOO has never posted an annual outflow since its inception in 2010. Vanguard’s growth has also been supported by the rise of ETF model portfolios, which bundle funds into ready-made strategies for advisers and investors.

• VOO has attracted $18 billion in 2025 inflows, boosting its assets to $626 billion.
• SPY remains the largest ETF globally with $637 billion in assets but faces growing competition.
• iShares Core S&P 500 ETF (IVV) is also gaining traction, reaching $610 billion in assets.

• Vanguard’s VOO charges a low 0.03% fee, outcompeting SPY’s 0.095% expense ratio.
• VOO appeals to retail investors and advisers, while SPY dominates among active traders.
• BlackRock’s IVV is another contender, having absorbed $87 billion in 2024 inflows.

• VOO is expected to surpass SPY as inflows continue to favor low-cost, diversified funds.
• IVV could challenge both SPY and VOO if BlackRock adopts more aggressive pricing strategies.
• The ETF market remains competitive, with low fees and liquidity driving investor preferences.

• VOO’s rapid growth, with $18 billion in inflows in 2025 and $116 billion in 2024, underscores its appeal to cost-conscious retail investors and financial advisers, positioning it to surpass SPY as the world’s largest ETF.
• Vanguard’s ultra-low expense ratio of 0.03%, compared to SPY’s 0.095%, makes VOO highly attractive for long-term investors seeking market-level returns at minimal cost.
• Unlike SPY, which experiences frequent net withdrawals due to active trading, VOO has never posted an annual outflow since its inception in 2010, highlighting its stability and growing popularity among buy-and-hold investors.
• The rise of ETF model portfolios, which bundle funds like VOO into ready-made strategies, has further fueled its growth by simplifying investment decisions for advisers and retail investors.
• VOO’s steady inflows reflect a broader trend toward low-cost, diversified funds, ensuring its continued dominance in the competitive ETF market landscape.

• SPY’s entrenched position as the go-to ETF for professional traders ensures it retains significant liquidity and trading volume advantages over VOO, making it difficult to fully dethrone SPY in certain segments.
• BlackRock’s iShares Core S&P 500 ETF (IVV), with $610 billion in assets and a matching 0.03% expense ratio, poses a strong competitive threat to both VOO and SPY, particularly if BlackRock adopts more aggressive pricing strategies.
• The broader ETF market remains highly competitive, with investor preferences for liquidity and trading flexibility potentially limiting VOO’s ability to attract institutional capital away from SPY.
• VOO’s reliance on passive investment strategies may expose it to greater risks during market downturns compared to actively managed alternatives or ETFs with different weighting methodologies.
• Market volatility or regulatory changes could disrupt the current inflow momentum into low-cost ETFs like VOO, creating headwinds for Vanguard’s growth trajectory in the near term.

Industry experts note that BlackRock’s iShares Core S&P 500 ETF (IVV) is also in a strong position, with $610 billion in assets following $87 billion in 2024 inflows. While IVV matches VOO’s 0.03% expense ratio, analysts speculate BlackRock may lower fees further to attract more investors. Todd Rosenbluth of TMX VettaFi highlights the strategic importance of dominating the ETF market, which could spur more competitive pricing in the years ahead.

As ETF inflows continue to reshape the landscape, VOO’s steady growth underscores a broader trend: cost efficiency and accessibility are increasingly driving investor behavior. With major players like Vanguard and BlackRock vying for the top spot, the ETF market is poised for intensified competition and continued innovation.