In a historic achievement, the largest and most established ETF globally, SPDR S&P 500 ETF Trust SPY, crossed $600 billion 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. This achievement reflects SPY's significant position in the investment world and the ongoing bull market.

This figure substantially exceeds the AUM of its closest competitors, iShares Core S&P 500 ETF IVV and Vanguard S&P 500 ETF VOO, which stand at $547 billion and $544 billion, respectively.

Behind the Solid Growth

The milestone came amid a robust rally in the U.S. stock market this year, driven by strong earnings, AI craze and rate-cut optimism. The S&P 500 Index is enjoying a huge rally with no signs of a slowdown. After logging in its best January-through-September performance since 1997, the broad market index has now entered into the third year of its current bull market run. The S&P 500 is notching a series of record highs and topped the 5,800 milestone for the first time last week. It is up about 23% since the start of the year. 

The strong trend will likely continue for the rest of the year, given the solid start of the third-quarter earnings season, with companies beating estimates and providing a reassuring comment on underlying economic trends. Total earnings for the 64 S&P 500 members that have reported third-quarter results so far are up 5.6% on 4.7% higher revenues, with 79.7% beating EPS estimates and 70.3% beating revenue estimates. This is a better performance than the group of companies seen in other recent periods (read: 5 Sector ETFs to Bet on This Earnings Season).

After holding the rates at a 23-year high for 14 consecutive months since July 2023, Federal Reserve Chair Jerome Powell kicked off the new rate cycle era by initiating a 50-bps cut in interest rates. This marked the first rate cut since 2020. The central bank projects two more rate cuts of 50 bps in its final two meetings this year, due in November and December. It also indicates another 100-bp rate cut next year and a 50-bp reduction in 2026, which means four rate cuts in 2025 and two in 2026. 

Lower interest rates will lead to reduced borrowing costs, helping businesses to expand their operations more easily and resulting in increased profitability. This, in turn, will stimulate economic growth and provide a boost to the stock market. However, the tensions in the Middle East and next month's election in the United States are expected to heighten market volatility. Stretched valuation is also a risk to the market rally.

SPY’s success also reflects the growing popularity of passive investing. The fund has shed about $5.7 billion in assets year to date, despite $22 billion inflows over the past month, per etf.com data.