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In a historic achievement, the largest and most established ETF globally, SPDR S&P 500 ETF Trust (SPY - Free Report) , hit half a trillion dollars in AUM — a first for any ETF. Launched in 1993 and tracking the S&P 500 Index, SPY has consistently led the global ETF market in terms of AUM, reflecting State Street's prominence as the third-largest ETF issuer globally. The achievement reflects SPY's significant position in the investment world.
This figure substantially exceeds the AUM of its closest competitors, iShares Core S&P 500 ETF (IVV - Free Report) and Vanguard S&P 500 ETF (VOO - Free Report) , which stand at $434 billion and $404 billion, respectively.
Behind the Solid Growth
The milestone came amid a robust rally in the U.S. stock market, driven by strong earnings, a resilient economy and a technology surge. The S&P 500 topped the 5,000 milestone for the first time earlier this month and is up more than 7% so far this year (read: 5 Technology Stocks Powering the S&P 500 ETF This Year).
Total fourth-quarter earnings of the 402 S&P 500 members who have reported results so far increased 4.9% from the prior-year period on 3.4% higher revenues. Of the companies that reported results, 78.6% beat EPS estimates and 64.4% surpassed revenue estimates. The pace of earnings and revenue growth represents an acceleration from the last couple of quarters, with the technology sector being a major contributor. Notably, the earnings growth is the best growth rate for the S&P 500 companies since the 6.2% earnings growth rate in the second quarter of 2022.
The resilience of the U.S. economy has led to risk-on trade. Factors like robust retail sales, consumer sentiment and a cooling trend in the producer price index indicate the possibility of the Fed achieving a soft landing, bringing inflation back to target without triggering a recession.
Further, the surge in investor interest in technology stocks, especially those benefiting from the growing fascination with artificial intelligence, has played a significant role in the S&P 500’s ascent. Notably, six of the "Magnificent Seven" — Apple Inc. (AAPL), Microsoft Corp. (MSFT), Alphabet Inc. (AAPL), Amazon.com Inc. (AMZN), Nvidia (NVDA) and Meta Platforms Inc. (META) — have been the biggest engine of stock market growth.
Nvidia’s blockbuster earnings report ignited the global rally for the stocks, pushing many indices to new highs. A leading U.S. chip designer exceeded fourth-quarter earnings and revenue expectations. The company reported a staggering 265% increase in revenues and provided an optimistic outlook, indicating a surge in demand for AI hardware. This not only showcased Nvidia's robust position in the AI chip market but also signaled promising prospects for the semiconductor industry in 2025 and beyond (read: Nvidia Drives AI and Semiconductor Stocks: ETFs to Gain).
Despite its impressive performance, SPY has experienced significant outflows, with investors withdrawing $27 billion from the fund this year. Matt Bartolini, head of SPDR Americas Research, attributes SPY's success to its liquidity and the diverse investor base it attracts, each with varying motivations.
SPY in Focus
SPDR S&P 500 ETF Trust holds 503 stocks in its basket, with each accounting for no more than 7.1% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, financials, healthcare and consumer discretionary accounting for a double-digit allocation each.
SPDR S&P 500 ETF Trust charges 9 bps in fees per year and trades in 66 million shares per day on average. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (see: all the Large Cap Blend ETFs here).
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S&P 500 ETF (SPY) Tops $500B in AUM
In a historic achievement, the largest and most established ETF globally, SPDR S&P 500 ETF Trust (SPY - Free Report) , hit half a trillion dollars in AUM — a first for any ETF. Launched in 1993 and tracking the S&P 500 Index, SPY has consistently led the global ETF market in terms of AUM, reflecting State Street's prominence as the third-largest ETF issuer globally. The achievement reflects SPY's significant position in the investment world.
This figure substantially exceeds the AUM of its closest competitors, iShares Core S&P 500 ETF (IVV - Free Report) and Vanguard S&P 500 ETF (VOO - Free Report) , which stand at $434 billion and $404 billion, respectively.
Behind the Solid Growth
The milestone came amid a robust rally in the U.S. stock market, driven by strong earnings, a resilient economy and a technology surge. The S&P 500 topped the 5,000 milestone for the first time earlier this month and is up more than 7% so far this year (read: 5 Technology Stocks Powering the S&P 500 ETF This Year).
Total fourth-quarter earnings of the 402 S&P 500 members who have reported results so far increased 4.9% from the prior-year period on 3.4% higher revenues. Of the companies that reported results, 78.6% beat EPS estimates and 64.4% surpassed revenue estimates. The pace of earnings and revenue growth represents an acceleration from the last couple of quarters, with the technology sector being a major contributor. Notably, the earnings growth is the best growth rate for the S&P 500 companies since the 6.2% earnings growth rate in the second quarter of 2022.
The resilience of the U.S. economy has led to risk-on trade. Factors like robust retail sales, consumer sentiment and a cooling trend in the producer price index indicate the possibility of the Fed achieving a soft landing, bringing inflation back to target without triggering a recession.
Further, the surge in investor interest in technology stocks, especially those benefiting from the growing fascination with artificial intelligence, has played a significant role in the S&P 500’s ascent. Notably, six of the "Magnificent Seven" — Apple Inc. (AAPL), Microsoft Corp. (MSFT), Alphabet Inc. (AAPL), Amazon.com Inc. (AMZN), Nvidia (NVDA) and Meta Platforms Inc. (META) — have been the biggest engine of stock market growth.
Nvidia’s blockbuster earnings report ignited the global rally for the stocks, pushing many indices to new highs. A leading U.S. chip designer exceeded fourth-quarter earnings and revenue expectations. The company reported a staggering 265% increase in revenues and provided an optimistic outlook, indicating a surge in demand for AI hardware. This not only showcased Nvidia's robust position in the AI chip market but also signaled promising prospects for the semiconductor industry in 2025 and beyond (read: Nvidia Drives AI and Semiconductor Stocks: ETFs to Gain).
Despite its impressive performance, SPY has experienced significant outflows, with investors withdrawing $27 billion from the fund this year. Matt Bartolini, head of SPDR Americas Research, attributes SPY's success to its liquidity and the diverse investor base it attracts, each with varying motivations.
SPY in Focus
SPDR S&P 500 ETF Trust holds 503 stocks in its basket, with each accounting for no more than 7.1% of the assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, financials, healthcare and consumer discretionary accounting for a double-digit allocation each.
SPDR S&P 500 ETF Trust charges 9 bps in fees per year and trades in 66 million shares per day on average. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (see: all the Large Cap Blend ETFs here).