The third largest ETF recently reached the age of 13. Yes, the Vanguard 500 ETF (VOO) is now Taylor Swift’s lucky number. (Am I one of the first people to use Ms. Swift and Vanguard ETFs in the same sentence?)
As the father of a Jewish son, the significance of this age is meaningful. My son turned 13 in June, three months before VOO. In our tradition, he became a man when he then read from the Torah at his bar mitzvah. It was indeed a time for celebration.
Vanguard has a lot to celebrate about VOO. VettaFi was honored to join the asset manager at the New York Stock Exchange (NYSE) for an opening bell ceremony last week. VOO has $330 billion in assets.
Vanguard Team at the NYSE
VOO Is Gaining Market Share
In the past year, the Vanguard ETF pulled in $34 billion of new money, ahead of $25 billion and $3 billion for IVV and SPY, respectively. IVV and VOO both have net expense ratios of 0.03%, lower than SPY’s 0.09%. This modest fee has made them more appealing to advisors and retail investors. Vanguard even charges 1 basis point less for VOO than their admiral mutual fund share class Vanguard S&P 500 (VFIAX) even though the $410 billion VFIAX came to market first.
SPY appeals to many ETF traders due to its relatively high volume. However, VOO traded over 4 million shares on average over the last 50 days. This is ample liquidity to meet the needs of most. VOO rose 13% on an annualized basis since inception through September 2023. Said differently, investors would have seen a fivefold increase if they bought and held from the beginning. Of course, past performance is not indicative of future results.