What’s Driving S&P 500 ETFs in 2024?

While S&P 500 index-based ETFs were down 4% in April, they remained positive for the year. We believe as more institutional and retail investors turn to ETFs, these products will further swell in size.

The three largest U.S.-listed ETFs are tied to the S&P 500 Index. The SPDR S&P 500 ETF (SPY) remains the biggest of the trio, with $500 billion in assets. The iShares Core S&P 500 ETF (IVV) and the Vanguard S&P 500 ETF (VOO) each have over $400 billion.

SPY Hit an ETF Milestone in 2024

SPY was the first ETF to trade in the U.S., in early 1993, and was the first fund to cross the $500 billion threshold, earlier this year. While the fund is used by retail investors, due in part to its strong brand, SPY particularly appeals to institutional investors. It trades more frequently than peers and has an extremely tight bid/ask spread. This is partially offset by a higher-than-peers’ 0.09% expense ratio. IVV and VOO charge 0.03%.

What’s Driving the Index?

In 2024, some of the mega-cap stocks inside SPY and peers were down as of April. However, the “Magnificent Seven” as a group still performed admirably. Led by Nvidia, the group contributed approximately half of the broader index’s return, according to S&P Dow Jones Indices.