VOO: Can the S&P 500 Hit More All-Time Highs in 2025?
- etf.com’s 2024 ETF of the Year has stolen the show again in 2025.
- VOO has long been the go-to for those who want broad market exposure with minimal fees.
Investors have piled into the Vanguard S&P 500 ETF (VOO) in 2025, with the fund pulling in a massive $68 billion in assets year to date, a clear sign of bullish sentiment across markets, but can the momentum continue?
As a proxy for market enthusiasm, VOO’s surge reflects the S&P 500’s historic recovery, followed by a string of new all-time highs since President Donald Trump paused tariffs in April. But after two extensions, those tariffs on goods from a range of trading partners, including the European Union, Mexico and more than 20 other countries, are set to kick in Aug. 1.
Notable country-specific rates include 30% on EU imports, 35% on Canadian goods, 25% on Mexican imports and up to 50% to 70% for other nations lacking formal trade agreements. This compares to an average of 2% to 3% at the beginning of 2025.
Will last-minute deals materialize in the next 10 days? Or will Trump kick the can down the road again and prolong the so-called "TACO" trade?
VOO Assets Surge on Cheap Fees, Dip Buying & FOMO
No matter what the market is doing, there’s no denying that VOO, etf.com’s 2024 ETF of the Year, has stolen the show again in 2025. For the first time ever, VOO overtook the SPDR S&P 500 ETF Trust (SPY) to become the largest ETF by assets under management, a milestone that underscores shifting investor preferences.
VOO has long been the go-to for those who want broad market exposure with minimal fees, and with Vanguard’s reputation for its investor-first philosophy and DIY attraction, combined with a seemingly no-lose, buy-the-dip, fear-of-missing-out (FOMO) environment in 2025, it’s not hard to see why it continues to attract capital like a magnet.
While more thematic or leveraged ETFs grab headlines, VOO steadily tracks the S&P 500. This year, that has been more than enough to capture market momentum. The fund’s $68 billion year-to-date haul and nearly $700 billion of total AUM is evidence of confidence in the rally sparked by April’s 90-day tariff pause, but it may also suggest a belief that this bull market can outlast rising risks.
VOO Tops AUM Growth in 2025
Source: etf.com & FactSet data as of July 17, 2025.
Climbing a Wall of Worry?
Despite looming tariff deadlines and growing geopolitical tensions, VOO and other equity funds seem unfazed. The market’s resilience might feel almost too strong, especially with inflation lingering and warnings that consumer spending could weaken in the second half of the year.
This is a textbook case of what market veterans call “climbing a wall of worry.” It’s when stocks rise steadily despite well-known risks until something finally tips the balance. With tariffs set to return in full force on Aug. 1, investors may be underestimating the impact on supply chains, prices and ultimately profit margins for companies within the index. If the consumer starts pulling back, especially in lower-income brackets, corporate earnings may take a hit by the fourth quarter.
Caution Warranted for VOO Investors
Like U.S. equity markets, Friday’s consumer sentiment looked good on the surface but, digging deeper, the highest reading since February isn’t promising. The University of Michigan’s report, released Friday, offered some good news, but the index remains 16% below its December 2024 level and far below its historical average, a reminder that optimism may be fragile.
That leaves markets in a curious position: priced to perfection with very little room for error. For stocks to keep rising rationally from here, investors will likely need to see:
- A fresh tariff pause or breakthrough deal
- Signs that consumer spending will hold up
- Inflation showing signs of cooling rather than reaccelerating
With VOO now leading the ETF pack, it’s worth asking whether the recent run is based on durable fundamentals or simply momentum and hope. Either way, the next few weeks will be critical. If the Aug. 1 tariffs go into effect, investors may finally be forced to take the wall of worry seriously.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in ETFs involves risks, and investors should carefully consider their investment objectives and risk tolerance before making any investment decisions.
At the time of publication, Kent Thune did not hold a position in any of the aforementioned securities.
