SPY: Will the World's Biggest ETF Be Dethroned for Good?

After holding the title of the world’s largest ETF for 32 years, the SPDR S&P 500 ETF Trust (SPY) briefly lost its crown last week to the Vanguard S&P 500 ETF (VOO).

This wasn’t the first time SPY has been dethroned. Back in 2011, the SPDR Gold Trust (GLD) temporarily surpassed it in assets under management. But this time feels different.

SPY has since reclaimed the top spot, but it likely won’t hold it for much longer. Unlike GLD, which tracks gold, VOO offers identical exposure to SPY—at a fraction of the cost. VOO’s expense ratio is two-thirds lower than SPY’s, giving it a distinct advantage.

Additionally, Vanguard’s reputation attracts legions of long-term, buy-and-hold investors who have steadily funneled money into VOO for years. That loyalty has chipped away at SPY’s lead. SPY launched 17 years before VOO, but 15 years of relentless inflows into the Vanguard ETF have erased that head start.

It’s not controversial to say SPY will permanently lose its No. 1 ranking soon. It’s also not a stretch to suggest it could fall to No. 3 this year if the iShares Core S&P 500 ETF (IVV) continues to gain ground.

The slide might not stop there.

QQQ, VTI, IBIT Aim For Top Spot

SPY had $636 billion in assets under management as of Feb. 20, just ahead of VOO at $633 billion and IVV at $608 billion. If trends persist, both funds will surpass SPY by the end of next year—if not sooner.

Beyond the top three, there’s a significant drop-off. The next-largest ETFs, the Vanguard Total Stock Market ETF (VTI) and the Invesco QQQ Trust (QQQ), have $481 billion and $342 billion in AUM, respectively.

VTI, another Vanguard fund with a strong investor base, has the potential to overtake SPY in time. QQQ, on the other hand, faces a steeper climb. It has taken in $92 billion in inflows over the past decade—more than SPY’s $61 billion—but it would need much more to catch up. Outperformance could help: QQQ has surged more than fivefold over the past decade, while SPY has more than tripled. However, relying on performance alone is an uncertain path to overtaking SPY.

Beyond QQQ, other ETFs aren’t likely to challenge SPY anytime soon. The Vanguard Growth ETF (VUG), Vanguard FTSE Developed Markets ETF (VEA), and Vanguard Value ETF (VTV) simply don’t have the inflows or performance to mount a serious threat.

But there is a dark horse: the iShares Bitcoin Trust (IBIT).

IBIT became the fastest ETF to reach $60 billion in AUM, doing so in just over a year. If demand for spot bitcoin ETFs remains strong, IBIT could grow into a multi-hundred-billion-dollar fund.

Currently, assets in spot bitcoin ETFs represent about 5%-6% of bitcoin’s market cap. If that figure increases, the AUM of these ETFs could multiply. IBIT, which alone accounts for 3% of bitcoin’s market cap, stands to benefit the most.

If bitcoin’s market cap expands—or if IBIT’s market share grows (or both)—it could easily become one of the six largest ETFs in the world. VUG, the current No. 6 ETF, sits at $163 billion in AUM. IBIT might not be far behind.