Is IVV Poised to Overtake SPY as the No. 2 ETF?

With the SPDR S&P 500 ETF Trust (SPY) holding the top spot as the largest exchange-traded fund since its inception in 1993, the Vanguard S&P 500 ETF (VOO) has taken the assets-under-management crown, highlighting the growing focus on lower expense ratios and long-term efficiency. 

Meanwhile, the iShares Core S&P 500 ETF (IVV) is positioned to challenge SPY, potentially becoming the second-largest ETF by the end of this year.

Let’s take a closer look at these giants and other major funds like VTI and QQQ, which continue to attract billions in AUM.  

Vanguard S&P 500 ETF (VOO): The New Star

VOO, a low-cost ETF tracking the S&P 500 Index, has been steadily climbing the AUM rankings due to its rock-bottom expense ratio of just 0.03% and its appeal to long-term investors. With AUM at $632 billion, VOO’s growth is fueled by its popularity among both retail investors and institutions looking for broad exposure to U.S. large-cap stocks.  

Unlike SPY, which uses a unit trust structure and is designed with short-term trading in mind, VOO is tailored for buy-and-hold investors, making it a favorite in retirement accounts. 

SPDR S&P 500 ETF Trust (SPY): The Longtime Leader

As the first U.S.-traded ETF, SPY held the title of the largest ETF by AUM for decades, currently managing more than $630 billion. Known for its unparalleled liquidity and tight bid-ask spreads, SPY remains the go-to choice for traders and institutions. However, its higher expense ratio of 0.0945% and outdated structure are beginning to weigh on its competitive edge. 

Tip: For a deeper dive, see our article: VOO vs SPY: Comparing the Top S&P 500 ETFs 

iShares Core S&P 500 ETF (IVV): The Quiet Contender

IVV, another ETF tracking the S&P 500, is quickly gaining ground on SPY. Managed by BlackRock’s iShares division, IVV has an expense ratio of just 0.03%, matching VOO in cost-effectiveness. With AUM over $609 billion, IVV appeals to cost-conscious investors who prioritize long-term growth.  

According to etf.com data, IVV pulled in $86.7 billion of assets in 2024, compared to $16.5 billion for SPY. This pace for flows suggests IVV could surpass SPY as the second-largest ETF before the end of 2025, cementing its place among the industry’s most prominent funds. 

Vanguard Total Stock Market ETF (VTI): A Broad Market Favorite

The Vanguard Total Stock Market ETF (VTI) is another massive player, with AUM exceeding $480 billion. Unlike VOO, which focuses solely on the S&P 500, VTI provides exposure to the entire U.S. stock market, including small- and mid-cap stocks. Its low expense ratio of 0.03% and comprehensive diversification make it a popular choice for investors seeking broad market exposure in a single fund. 

Invesco QQQ Trust (QQQ): The Tech Powerhouse

The Invesco QQQ Trust (QQQ), with AUM of $338 billion, is a favorite among growth-oriented investors. QQQ tracks the Nasdaq-100 Index, which is heavily weighted toward technology companies including Apple Inc. (AAPL), Microsoft Corp. (MSFT), and Amazon.com Inc. (AMZN). Its focus on innovation and growth has made it a standout performer in recent years, particularly during the tech boom.  

While QQQ has a higher expense ratio of 0.20%, its strong historical returns and concentration in high-growth sectors continue to attract a loyal investor base. 

The Future of ETF Leadership

As ETFs grow in popularity, the battle for dominance among the largest funds will likely intensify. VOO’s rise to surpass SPY underscores the increasing emphasis on low costs and efficiency in modern investing. Meanwhile, IVV’s steady climb highlights the importance of offering competitive expense ratios and a performance edge.  

Funds like VTI and QQQ also demonstrate the power of diversification and sector-specific strategies in shaping investor preferences.  

Whether VOO and SPY maintain their leadership or yield to their challengers, the competition among these ETF giants will continue to drive innovation and provide investors with ever-improving options for achieving their financial goals.