A Vanguard exchange traded fund is picking up interest as a low-cost fund option to track the S&P 500, with one wealth management firm also pointing to diminishing implicit costs associated to the bid-ask spread.

Bestinvest is recommending its clients to take a look at the Vanguard S&P 500 ETF (NYSEArca: VOO) as the ETF option for exposure to the S&P 500, reports Matthew Jeynes for FTAdviser. [ETF Chart of the Day: S&P 500]

“For internal and external costs, we found the Vanguard ETF to be very attractive compared to other available funds, with a low on-going cost (net of withholding tax),” Ben Seager-Scott, senior research analyst at Bestinvest, said in the article.

VOO is the cheapest S&P 500 ETF at 0.05%, comapared to the iShares Core S&P 500 Index ETF (NYSEArca: IVV), which has a 0.07% expense ratio, and the SPDR S&P 500 ETF (NYSEArca; SPY), which has a 0.0945% expense ratio. [ETF Options to Track the S&P 500]

Moreover, Vanguard recently executed a 1-for-2 reverse split on VOO as a way to diminish implicit costs of trading the fund through tightening its bid-ask spread. [Vanguard Opens Up ‘New Front’ in ETF Fee War]

“We have every reason to expect this spread will continue to tighten as this fund continues to attract fresh interest,” Seager-Scott added. “As a result, we believe this fund is now considerably better placed than rivals who have previously relied on this liquidity gap to charge a premium.”