An exchange-traded fund (ETF) has surpassed $1 trillion (about 1,500 trillion won) in total assets under management (AUM) for the first time. Vanguard Group's S&P 500 ETF (VOO) has set a historic milestone, cementing its position as a flagship product symbolizing the growth of the global ETF market.
According to Bloomberg, VOO crossed $1 trillion in total AUM on Wednesday after attracting $1.7 billion in new inflows that day. It is the first ETF ever to surpass $1 trillion in assets under management.
VOO is an index ETF that tracks the S&P 500, the benchmark U.S. stock index, and was launched in 2010. Its ultra-low-cost structure and product characteristics suited for long-term investing have driven steady inflows from both retail and institutional investors. The ETF's total expense ratio stands at 0.03% per year, among the lowest in the industry.
In particular, more than $69 billion in new capital has flowed into the fund this year alone, with the rally in New York equities since April analysts say has helped expand its assets under management.
VOO overtook the SPDR S&P 500 ETF Trust (SPY) — the first U.S. ETF — last year to become the world's largest ETF by AUM, and has now become the first ETF in history to enter the "$1 trillion club."
Market observers say the record is a symbolic event highlighting the maturity of the ETF industry. Ben Johnson, head of client solutions at fund research firm Morningstar, said in an interview with Bloomberg, "The $1 trillion milestone is the latest sign that the ETF market has matured," adding, "ETFs, once on the periphery, have now become a basic investment vehicle for hundreds of millions of investors around the world."
Vanguard, founded in 1975 by John Bogle, who is regarded as the father of low-cost index funds, managed more than $12 trillion in assets as of November last year. It is the world's largest mutual fund provider and the second-largest ETF provider after BlackRock.
