Vanguard's New S&P 500 ETF Takes on SPY | ETF Trends

Leave it to Vanguard, one of the exchange traded fund (ETF) industry’s low-price leaders, to take on the first and largest ETF in the world – the SDPRs (NYSEArca: SPY) – with its newest ETF.

Vanguard launched nine brand-new ETFs this morning, but the one that’s making the biggest splash with industry watchers is the Vanguard S&P 500 ETF (NYSEArca: VOO). The provider will challenge the long-standing SPY on price, charging 0.06% vs. 0.09% for SPY. Naturally, the industry is watching to see whether VOO can nab some of SPY’s investors. SPY has about $68 billion in assets, making it the industry’s largest ETF. [The Case for Large-Cap ETFs.]

In addition to VOO, Vanguard also launched:

  • Vanguard S&P 500 Value ETF (NYSEArca: VOOV), 0.15%
  • Vanguard S&P 500 Growth ETF (NYSEArca: VOOG), 0.15%
  • Vanguard S&P Mid-Cap 400 ETF (NYSEArca: IVOO ), 0.20%
  • Vanguard S&P Mid-Cap 400 Value ETF (NYSEArca: IVOV), 0.20%
  • Vanguard S&P Mid-Cap 400 Growth ETF (NYSEArca: IVOG), 0.20%
  • Vanguard S&P Small-Cap 600 ETF (NYSEArca: VIOO ), 0.15%
  • Vanguard S&P Small-Cap 600 Value ETF (NYSEArca: VIOV), 0.20%
  • Vanguard S&P Small-Cap Growth ETF (NYSEArca: VIOG), 0.20%

Vanguard, as always, is competing on low prices, something it has always set out to do. It will be interesting to see if VOO catches on with advisors and lures them away from SPY. There’s something in the SPDR brand and it has billions in assets. Vanguard is clearly hoping to chip away at that from an expense standpoint while still providing liquidity. [Where You Can Go for Cheap ETF Trades.]

The question will be whether Vanguard can keep spreads tight and accurately track the S&P 500 index.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.