The popular SPDR S&P ETF (SPY), which tracks the S&P 500 index, reached a new record high Monday as investors continued to pile into stocks in response to the current bull market. The fund has reached a record high of $565. This means that the fund has increased by over 175% since its lowest point, which was in 2020.
The SPY will be transmitted by IVV and Voo
In terms of assets, the Vanguard S&P 500 Fund (VOO) is likely to pass the SPY ETF.
Morningstar data shows that SPY has assets of over $558 billion, while IVV has assets of over $506 billion. VOO’s assets are $489 billion.
Eric Balchunas who covers ETFs at Bloomberg said that the IVV Fund added over $17 billion to its assets in the past month. About $55 billion remain to be added before it reaches that goal. He expects VOO and IVV to pass SPY later this year.
SPY ETF is still one of the most popular funds on the market, despite the trends. It has a higher daily volume than IVV and the VOO.
The cost of SPY is higher than VOO or IVV
Investors are likely to be more concerned with their fees. SPY has an expense ratio that is 0.09%, while VOO and IVV are only 0.03%.
This is a small spread but the fees can accumulate over time, as many passive investors keep their money for years. All other factors being equal, an investment of $100k in SPY would cost $90 to manage in a single year, while an investment in IVV or VOO with the same amount will only cost $30.
In 30 years the $90 fee will be worth $2,500 while the $30 fee will only be $900. Since these funds track the exact same asset, investing in the cheaper ones makes sense. The Morningstar analysts also found this when they compared VOO to SPY. They wrote:
“VOO receives a rating of gold, and SPY is rated as the second best. Fees and inefficiencies within the unit investment trust structure are to blame. “The differences may only be minor, but that’s no excuse to ignore the opportunity for change.”
SPY’s five-year total return was 101.5%, while VOO and IVV both returned more than 102%.
Compare SPY, VOO and IVV ETFs
Stocks IVV, SPY and VOO are all bullish, but there is still risk.
TradingView SPY chart
In my recent S&P 500 forecast, I mentioned that it had many catalysts. Earnings look good and the Fed is expected soon to begin cutting interest rates. The rising odds of Trump’s victory are also positive.
Federal Reserve will start cutting rates in September, while FactSet predicts that earnings growth of over 8%. Fed rate cuts are expected to be good for stocks, as risk-averse investors will move away from money market funds and into equities.
While US stocks have experienced some sharp declines in recent years, the overall trend has been positive.
Technically, however, it is possible that these three ETFs could pull back over the next few weeks. Besides, oscillators such as the Relative Strength Index and Stochastic Indicator have reached an overbought state.
The ETFs also have what appears to be a rising wedge pattern on the chart, which is a popular sign of a reversal.
Fundamentally, S&P 500 is overvalued. The forward P/E ratio of 21 is higher than the average five-year value of 19.
This post S&P SPY ETF will be passed by VOO and IVV in a key measure may be updated as new information becomes available
