New York, June 9, 2026, 14:02 EDT
- Vanguard’s S&P 500 ETF is the first ETF to top $1 trillion in assets.
- The milestone is putting focus on fees, index concentration, and whether investors pick VOO or stick with broader funds like VTI.
- The tech rout on Tuesday sharpened the debate.
Vanguard’s S&P 500 ETF is now the first ETF to hit $1 trillion in assets, a milestone for the low-cost U.S. index fund space and a new sign of how much money is concentrated in these trackers.
S&P 500’s latest milestone comes as investors revisit the debate over whether the index is too pricey after tech and AI names drove a long rally. Vanguard’s VOO ETF was down about 1% Tuesday afternoon in New York, with falling tech shares weighing on the main indexes.
The question is back for investors in a new market: stick with the cheapest S&P 500 tracker, switch out to a total-market fund, or sit on the sidelines for now. An ETF works as a basket of securities that trades on an exchange just like a stock.
Vanguard said its fund topped $1 trillion in assets last week, hitting the milestone less than 18 months after VOO passed State Street’s SPDR S&P 500 ETF (SPY). VOO has a 0.03% management fee, while SPY charges 0.09%. BlackRock’s iShares Core S&P 500 ETF (IVV) also charges 0.03% and has around $860 billion, Reuters reported.
“This is a key milestone,” Todd Rosenbluth, head of research at VettaFi, told Reuters. He said investors are still looking for “low-cost broad market exposure” with VOO. The fee gap between the three funds tracking nearly the same index has turned into a big commercial weapon. Reuters
Valuation is now a key issue. Motley Fool’s David Dierking said Monday the Shiller CAPE ratio was at 42, close to where it stood during the late-’90s tech boom. Even at these levels, Dierking said long-term investors with decades ahead shouldn’t see that as a reason to stay out of VOO.
Motley Fool on Tuesday discussed Vanguard’s Total Stock Market ETF (VTI) as a bigger play compared to VOO. VTI holds 3,494 stocks, while VOO tracks 505, the article said. Both have a 0.03% expense ratio. VTI is up 8.71% this year by net asset value, just topping VOO’s 8.42%. Over 10 years, VOO posted the higher average annual total return.
The decision goes beyond picking a ticker. VOO tracks the S&P 500, so it holds the biggest U.S. companies by market cap. With VTI, investors also get exposure to mid- and small-cap stocks. That can lower risk, but it doesn’t always help—some years, like when big tech names lead, the smaller names fall behind.
Concentration is still the big risk. If Nvidia, Apple, Microsoft, Amazon and Alphabet stay out front, VOO might keep outperforming. But if those high valuations drop or tech loses its lead, investors buying up here could see a bigger hit than the fund’s simple branding lets on. Tuesday afternoon’s trade was a warning: the Nasdaq 100 slid over 3% by 1 p.m. ET as chip stocks fell and the S&P 500 dropped close to 2%.
$1 trillion in assets tells more about investor habits than just a single day of trading. There’s steady money flowing into low-cost funds pushing investors to hold the whole market versus picking stocks. VOO now stands as the top example — big, cheap, and tough for competitors to challenge.
