S&P 500 ETF Options

Recent options activity in the largest ETF in the U.S. landscape in terms of assets under management at $146 billion, SPY (SPDR S&P 500, Expense Ratio 0.09%) which has involved mostly notable upside year-end call buying gives us a quick opportunity to discuss S&P 500 Index tracking ETFs.

SPY itself, despite the increase in call buying lately, has seen net outflows of approximately $3.7 billion in recent sessions, and related ETF, IVV (iShares Core S&P 500, Expense Ratio 0.07%) has lost more than $400 million via net redemptions as well. IVV is no slacker in its own right, now the fourth largest ETF in the U.S. marketplace with $45.4 billion in AUM.

Vanguard entered the S&P 500 Index ETF tracking market much later than State Street (1993 with SPY) or iShares (2000 with IVV) with VOO (Vanguard S&P 500 ETF, Expense Ratio 0.05%) which launched in 2010.

One can see the trend here rather evidently, and that is “declining expense ratios” over time since the launches of these funds, and VOO has raised $11.7 billion since inception.

Institutional managers generally have other specific requests of their S&P 500 Index tracking ETF of choice outside of expense ratio as well, including options availability and liquidity and tracking needs.