Late last week we saw substantial creation activity in one of the newer ETFs that track the S&P 500 index, Vanguard S&P 500 (NYSEArca: VOO). Last Wednesday, more than 5 million shares of VOO exchanged hands, versus average daily volume of about 619,000 shares.

More than $300 million entered the fund, equivalent to about 10% of the outstanding assets, and this could be a sign of an institutional holder or holders swapping from a larger, more established ETF that tracks the S&P 500 such as SPDR S&P 500 (NYSEArca: SPY), into the less expensive VOO.

SPY, although it dwarfs VOO in terms of asset size and daily trading volume, has an expense ratio of 9 basis points whereas VOO charges 6 basis points, and both instruments track the S&P 500 index, so a “price war” is evident among established ETF issuers here, State Street and Vanguard.

SPY has obviously been around much longer than VOO, having debuted back in 1993 while VOO launched in the latter part of 2010, but since inception in September of 2010, VOO has actually outperformed SPY, up 27.42% versus SPY’s 27.19% gain.

While it is difficult to say that this “swap from SPY to VOO” is indeed what occurred last week, it is certainly feasible as VOO is nearing its 2 year live track record and is likely hitting more institutional screens as the ETF grows in asset size and in terms of trading volume.

Vanguard S&P 500

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Full disclosure: Tom Lydon’s clients own SPY.