Vanguard has surpassed BlackRock as the manager of the world’s second-largest ETF.

What Happened: Vanguard’s S&P 500 ETF VOO has edged past BlackRock’s iShares Core S&P 500 ETF IVV in terms of assets. As of last Friday, VOO held $540.76 billion, slightly exceeding IVV’s $540.66 billion, based on Morningstar data. This marks a notable change, as VOO was $58 billion behind IVV at the start of 2022, Financial Times reported on Tuesday.

VOO is now trailing the SPDR S&P 500 ETF Trust SPY by $50 billion, which remains the largest ETF globally. Analysts, including Bryan Armour from Morningstar, predict that VOO could surpass SPY by 2025 or 2026 if its current growth continues.

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Vanguard’s broader S&P 500 vehicle holds $1.28 trillion in assets, ranking as the second-largest investment fund globally. Meanwhile, the net assets held by BlackRock’s IVV ETF is $540.10 Billion.

As per Benzinga Pro, as of Monday, the net asset value (NAV) of year-to-date (YTD) returns of VOO has risen 21.10%. On the other hand, the NAV of YTD returns of IVV has been higher by 21.43%.

Both Vanguard and BlackRock’s ETFs charge an annual fee of 3 basis points, attracting retail investors. The ETF market has seen substantial growth, with assets exceeding $10 trillion in the U.S., nearly doubling over four years, according to ETFGI.

Why It Matters: The rise of Vanguard’s VOO reflects a broader trend of investors gravitating towards lower-cost ETFs. In May, a significant shift among major ETFs, with SPY experiencing outflows while VOO attracted new investments. This trend indicates a growing preference for cost-effective investment options among investors.

Additionally, in September, Vanguard’s ETFs reached new highs as the S&P 500 Index hit record levels, further solidifying Vanguard’s position in the market.

Photo via Shutterstock

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari