BlackRock’s S&P 500 ETF has outgunned its State Street Global Advisors’ (SSGA) rival in Q1 despite the latter’s headline fee cut.
The $84.6bn iShares Core S&P 500 UCITS ETF (CSPX) recorded $4.7bn inflows in Q1 – the highest of any ETF in Europe – and ahead of the $3.4bn poured into the SPDR S&P 500 UCITS ETF (SPY5), according to data from ETFbook.
The flows come despite CSPX holding a total expense ratio (TER) of 0.07%, more than double SYP5’s 0.03% following its drastic reduction in fees last year.
Despite coming second best to CSPX, SPY5 has seen its assets more than double since it reduced its TER at the end of October, growing from just over $5bn to $12.5bn at the end of March.
Over the same period, the S&P 500 index has increased by 23.6%.
The pair’s closest rivals also booked inflows over the quarter as investors continued to shrug off overconcentration concerns stemming from the AI boom.
The Vanguard S&P 500 UCITS ETF (VUSA) and the synthetic Invesco S&P 500 ETF (SPXS) recorded $1.5bn and $939m, respectively.
Chart 1: S&P 500 UCITS ETF Q1 2024 inflows
Name | Q1 2024 flows | Total AUM | TER |
|---|---|---|---|
$4.7bn | €61.4bn | 0.07% | |
SPDR S&P 500 UCITS ETF (SPY5) | $3.4bn | $12.5bn | 0.03% |
Vanguard S&P 500 UCITS ETF (VUSA) | $1.5bn | $51.6bn | 0.07% |
Invesco S&P 500 UCITS ETF (SPXS) | $939m | $25.1bn | 0.05% |
Investors have been attracted by the low headline fee but have been quick to point out the economic viability of the product and the need to consider the total cost of ownership.
The ongoing charges figure (OCF) is just one element investors need to consider, with the benefits of a low fee sometimes eroded by wider bid-ask spreads.
SSGA incorporated SPY5 into its securities lending programme – along with 66 other ETFs – in a bid to make the move more economically viable.
SSGA’s competitors have yet to respond to the fee cut, with SPY5 remaining someway off in terms of assets under management.
