Nearly a decade after the first ETF did it, another exchange-traded fund is about to hit a key milestone. The iShares Core S&P 500 ETF (IVV) is fast approaching the $100 billion in assets under management (AUM) mark, a level first reached by the world's largest ETF, the SPDR S&P 500 (SPY), in December 2007.
Since the $232 billion SPY did it more than nine years ago, no exchange-traded fund has become successful enough to challenge $100 billion. But the nearly 17-year-old IVV, with a current AUM of $96.4 billion, looks poised to repeat that impressive feat.
IVV's ascent has been surprisingly rapid. A year ago, the fund had only $65 billion in assets; five years ago, it had $28 billion. Part of it has to do with expenses. After price cuts in October, IVV is now the cheapest ETF offering exposure to the S&P 500, with a mere 0.04% expense ratio—less than half the expense ratio of SPY and even a hair lower than the expense ratio of the Vanguard S&P 500 Index Fund (VOO) (0.05%).
Of course, the surge in IVV's underlying index, the venerable S&P 500, has also helped bolster assets for the fund. In the past 12 months, the index is up 22%, while for the past five years, it's up 73%. The S&P 500 has been the go-to index for investors wanting exposure to the U.S. stock market through ETFs.
In fact, three of the top five largest U.S.-listed ETFs are S&P 500 funds. They've all seen their assets climb swiftly in the past year, though not quite at the rate of IVV.