BlackRock Looks to Take ETF Volume Crown from State Street

State Street Corp. (STT) is on track to lose its position as the world leader in ETF trading volume, as investors aggressively snap up BlackRock Inc. (BLK) funds, according to Bloomberg Intelligence.

State Street, whose SPDR business is the third-largest U.S. ETF issuer by assets behind BlackRock’s iShares and The Vanguard Group, controls 31% of U.S. exchange-traded fund trading volume, Bloomberg ETF Analyst Athanasios Psarofagis wrote. While rival BlackRock holds 25%, its share is growing faster thanks to trading in the iShares Bitcoin ETF Trust (IBIT), its spot Bitcoin fund, and the iShares Core S&P 500 ETF (IVV).

Volume is critical in the ETF business where the three largest funds, the Vanguard S&P 500 ETF (VOO), the SPDR S&P 500 ETF Trust (SPY) and IVV charge rock-bottom fees and count on huge assets to generate income. The $607.4 billion SPY, which this year lost its title as the world’s largest ETF to the $679.8 billion VOO, is the most expensive among the world’s three biggest ETFs.  

“BlackRock has steadily narrowed the gap and is on track to take the No. 1 spot,” Psarofagis wrote.

SPY Volume  

VOO has become the largest ETF due to winning the most investor money this year, hauling in a net $80.9 billion while the other two big funds have had outflows. Still, SPY typically does more volume: Last week, 585 million shares traded, crushing VOO’s 67.8 million and IVV’s 66.8 million, according to FactSet data on etf.com.

IBIT, the fastest-growing ETF on record, had volume of 339.7 million shares last week.

IBIT One-Month Price and Volume—Source: FactSet

Volume overall has grown “dramatically” in the past few years, and now about $13 trillion trades each quarter, Psarofagis wrote. The top 10 ETFs account for 44% of all volume and, while that’s concentrated, it’s actually broadened from a peak of 51%, he said.

Analysts have speculated that IVV may soon surpass SPY to become the second-largest ETF.