Issuers, Experts Reflect on SPY’s 30th Anniversary

Issuers, Experts Reflect on SPY’s 30th Anniversary

ETF industry leaders also project what’s in store for the next 30 years.

Reviewed by: Shubham Saharan & Heather Bell
Edited by: Shubham Saharan & Heather Bell

This article is part of an ongoing series celebrating the 30th anniversary of the first ETF listed on U.S. exchanges. 



Read more from our 30th anniversary coverage:

Jim Ross Looks Back Over SPY’s 30 Years

Vanguard Zeros in on BlackRock’s ETF Crown

30 ETF Milestones Over 30 Years

ETF Industry’s Next 30 Years of Twists and Turns 


The SPDR S&P 500 ETF (SPY) debuted in 1993 as the first U.S.-listed exchange-traded fund. What was a fund with a little over $6.5 million in assets has grown to nearly $355 billion in assets. The ETF industry itself has grown beyond expectations, and now totals over $6.5 trillion.  

“If you think of SPY as the iPhone, the form of technology allowed for more applications. You don't have Uber or Venmo without the iPhone,” Matt Bartolini, managing director and head of SPDR Americas Research, said in an interview with “The iPhone was the original innovation, the infrastructure that bred more innovation—that’s what SPY is.”  

As the industry celebrates a milestone with SPY’s 30th birthday, here’s what industry experts have to say about the past three decades of the ETF industry, and what we have to look forward to in the next 30 trips around the sun. 

Increasing Accessibility 

ETFs have been the vehicle known to “democratize investing.” With their real-time pricing, ability to trade intraday and lower expenses, ETFs are set to be a preferred investment vehicle in the years to come.  

“The biggest lesson learned over the last three decades is that investors appreciate the control ETFs give them,” said Noel Archard, Alliance Bernstein’s global head of ETFs. “Putting aside all of the other benefits of the ETF structure, the exchange-traded feature allows an investor to pick their price, their timing and where they want to hold their assets.” 

“Plus, they’re not impacted by the trading other investors are doing in the fund,” Archard added. “Until a ‘better-mousetrap’ comes along due to technology advances, or regulatory changes, this factor will continue to make the ETF a preferred tool in most investor portfolios.” 

“The launch of the first ETF upended the investment industry, with its effects still being felt decades later. Perhaps its greatest impact, though, has been how ETFs have improved access to markets,” said Rachel Aguirre, head of U.S. iShares Product at BlackRock. “This access has benefited not only the millions of direct users of ETFs, but it’s also had a transformational impact on markets themselves, making them more efficient, and investing in them more affordable.” 

“ETFs have doubled every rolling five-year period of their existence, and the growth is still accelerating,” noted Bryon Lake, global head of ETF Solutions at JPMorgan Asset Management. “We see this pattern playing out for decades to come. That said, it’s already having a profound effect on how our clients build portfolios.”  

“The ETF has delivered incredible value to consumers, value that traditional investments such as mutual funds find almost impossible to compete with,” said Will Rhind, CEO and founder of GraniteShares. “The ETF wrapper will continue to evolve and will contain more and more innovative strategies. As the ETF offering expands, customers are increasingly looking for more targeted or concentrated exposures. Whether that be with single-stock ETFs or specific themes, this category is one to watch.” 

More Conversions to Come  

The first mutual-fund-to-ETF conversion happened in March 2021, and since then, mutual funds totaling more than $40 billion have shed their skin to become ETFs. Bloomberg Senior ETF Analyst Eric Balchunas has projected that, in the next decade, that number will rise to $1 trillion. The trend could be a game changer for both the mutual fund and ETF industries. 

“Beyond continued organic flows and interest, ETFs will see many legacy mutual funds simply move assets and customers over to the ETF wrapper, either by conversions, clones or BYOA,” Balchunas said. “At the same time, I think we'll see a lot of creative and even crazy new launches as issuers look to grab the nonbeta portions of portfolios.”  

“In the near term, I think we’ll see more asset managers embrace the structure, with ETF issuance eventually becoming the default offering outside of the retirement space,” Archard said. “We’ll see more mutual funds converting into ETFs, more pairing of ETFs and SMAs [separately managed account] within a UMA [unified managed account] offering, and an explosion of formerly inaccessible investments being held in ETFs as tokenization of assets becomes more prevalent.”  

Low-Cost Options Are Essential  

Fee compression has been an ongoing theme in the ETF space for decades. Today there are several funds with expense ratios of zero. ETF costs are further lowered with the advent of commission-free trading and the savings incurred because of their tax efficiency.  

“The last 30 years have seen ETFs succeed as low-cost and transparent building blocks for institutional and individual investment strategies and also as liquid and efficient trading tools for shorter-horizon investors,” said -Joanne Hill, chief advisor for research and strategy at Cboe Vest. 

“For many investors, ETFs have become the vehicle of choice for low-cost, broadly diversified exposure to the stock and bond markets,” Janel Jackson, principal and global head of ETF Capital Markets and Broker and Index Relations at Vanguard. “Despite a challenging market environment across all major global asset classes in 2022, investors continued to embrace ETFs for their low costs, diversification, tax efficiency and ease of access. While we’ll undoubtedly see continued innovation in the ETF space going forward, many investors will continue to use broadly diversified, low-cost index ETFs for core asset class exposure.” 

Fixed Income Is the Future  

Bond markets faced the worst year in history in 2022. Still, investors poured billions into the often hard-to-access fixed income market via ETFs. That segment is set to grow as bond ETF offerings continue to expand.  

“The availability and use of fixed income securities and strategies in ETF-packaging will be a high growth area for ETF assets as interest rates stabilize at higher levels than in the last 30 years,” Hill said.  

“While ETFs have been improving access to equity markets for decades, their impact on bond markets has been even more profound. When iShares created the first bond ETF over 20 years ago, it was nearly impossible for an individual to access bonds, without haggling with a broker or paying for a pricey mutual fund,” Aguirre explained. “Today, through bond ETFs, investors can buy a portfolio of thousands of bonds with the click of a button. Yet bond ETFs, at $1.7 trillion in assets, are still only 2% of the global fixed income market. As we look towards the next 30 years, we see a tremendous runway of growth for bond ETFs. In fact, we project growth to $5 trillion by 2030.”