SPY With $200B Rivals Biggest Mutual Funds

December 03, 2014

The largest ETF in the world is now also trumping some of the biggest mutual funds in size.

The SPDR S&P 500 ETF (SPY | A-99) has long been the biggest ETF in the world, but now that it has exceeded $200 billion in total assets, the ETF has surpassed even some of the biggest mutual funds in terms of size. Today SPY is one of largest open-ended funds in the world, possibly second only to the Vanguard Total Stock Market Index Fund (VTSAX).

The Vanguard Total Market Fund has more than $380 billion in assets, and that’s not including the institutional share class. But SPY is now bigger than the Vanguard 500 Index Fund (VFINX), which had $197.4 billion in assets at the end of November, including all share classes—investor, admiral and ETF shares. A separate S&P 500 portfolio, the Vanguard Institutional Index Fund, has another $187.6 billion, meaning Vanguard has at least $385 billion in assets tied to the popular benchmark.

SPY is also now bigger than the Pimco Total Return Fund (PTTRX), long heralded as the world’s largest bond mutual fund. While it still rules the fixed-income space in terms of assets, the fund has dropped to about $163 billion in assets following sizable redemptions on the heels of Bill Gross’ September departure from the firm. The ETF version of that fund, the Pimco Total Return ETF (BOND | B), has $2.43 billion.

That said, this $200 billion milestone for SPY is significant to the extent that it epitomizes the astounding—and ongoing—growth of the ETF market. Consider that in the past five years, investors pulled more than $411 billion from U.S. equity mutual funds alone, and poured more than $301 billion into domestic equity ETFs in the same period, according to data from the New York-based financial markets trading firm ConvergEx.

Flows Plus Market Movement

SPY’s upward trajectory in the fund world is a function both of asset gathering and, to a greater degree, market movement.

The numbers we crunch show that SPY and two competing S&P 500 ETFs have each gathered more than $9 billion so far this year through November. That’s a bit less than 5 percent of SPY’s current assets of $202.5 billion.


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