Another First For The SPDR S&P 500 ETF
The SPDR S&P 500 ETF (NYSE:SPY) is the exchange traded fund that started an investing revolution. SPY, the first ETF to trade in the U.S., celebrated its 25th anniversary on Monday while notching another milestone.
SPY became the first ETF to hit $300 billion in assets under management, meaning its assets under management are nearly double those found in the second-largest U.S. ETF, the rival iShares S&P 500 Core ETF (NYSE:IVV), according to State Street Global Advisors data.
SPY and IVV are the only ETFs in the world with more than $100 billion in assets.
SPY's assets under management tally is also more than triple the $90.2 billion residing in the Vanguard S&P 500 ETF (NYSE:VOO).
A True Giant
Not only is SPY the most heavily traded ETF in the U.S., it is also one of the most heavily traded U.S.-listed securities of any variety. On any given day, turnover in SPY is about 3.5 times that of Apple Inc. (NASDAQ:AAPL). Apple is the highest-capitalized U.S. company and the iPad maker is also the largest component in the cap-weighted S&P 500.
“With an average daily trading volume of nearly $16 billion, SPY is the most heavily traded ETF and equity security in the world,” said SSgA.
On its own, SPY trades as much as the next 18 largest ETFs combined, according to its issuer. That group of 18 includes IVV, VOO and the Vanguard Total Stock Market ETF (NYSE:VTI), just to name a few.
A pivotal part of the total cost of ownership equation with ETFs is the bid/ask spread, or the difference between how much buyers are willing to pay and how much sellers are willing to accept. Tight spreads reduce the total cost of ownership for investors and SPY has some of the tightest spreads in the ETF universe.
“Not only does SPY allow investors to get in and out of the market with ease, it also enables them to do so at a low cost,” said SSgA. “Higher liquidity means tighter spreads between the bid and ask price of the SPY ETF, which translates into reduced trading costs for investors.”
Issuer data indicate that over the past year, SPY's spreads have been lower than those on rivals such as IVV and VOO.
Disclosure: The author owns shares of VOO.
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