The iShares Core S&P 500 ETF (NYSEArca:IVV) is now the
fourth-largest U.S.-listed ETF after net inflows of $212 million in
May-and positive market action-pushed it two spots up in the
rankings in one month.
The fund, which now has $42.55 billion in total assets, ended
April with $41.36 billion, and basically switched places with the
iShares MSCI Emerging Markets Index Fund (NYSEArca:EEM). But IVV
also surpassed the iShares MSCI EAFE Index Fund (NYSEArca:EFA),
which ended both May and April in the No. 5 spot.
What makes this rising trajectory noteworthy is the fact the
13-year-old fund hadn't been a regular member of the top-asset
gatherers list for many years. But it seems to be gathering assets
faster since iShares rebranded it a "Core" fund last October, and
slashed its price tag some 22 percent to 0.07 percent. That's $7
per $10,000 invested.
Indeed, since the beginning of October, investors have poured a
net of nearly $6 billion into this fund-$2 billion of it came in
that very first month alone.
That's particularly impressive considering that IVV swims in one
of the most popular pockets of the ETF industry, namely the U.S.
large-cap space, where funds like the SPDR S&P 500 ETF
(NYSEArca:SPY)-the long-standing No. 1 ETF in terms of
assets-compete. SPY has gathered only a net of $3.5 billion in that
same October-to-date period.
The Skinny On 'Core'
It seems iShares' decision to launch a series of what it calls
"Core" funds, and rebrand some existing strategies to fit under
that umbrella of now-10
, is paying off.
Year-to-date, this family of ETFs that include the likes of the
iShares Core Total U.S. Bond Market ETF (NYSEArca:AGG), and the
iShares Core MSCI Emerging Markets ETF (NYSEArca:IEMG), has
attracted a combined net of some $5.75 billion in assets, according
to data compiled by IndexUniverse.
In fact, only one of the 10 ETFs-the iShares Core Long-Term U.S.
Bond ETF (NYSEArca:ILTB)-has bled assets this year, to the tune of
$136 million. And that's not surprising, given investors' ongoing
aversion to long-dated U.S. government debt in the current
environment of already-low rates and nagging concern that the long
end of the bond market is in for a nasty correction when rates do
start to normalize.
Until the unveiling of the Core brand, iShares had been watching
lower-cost competitors such as Vanguard, and even Charles Schwab,
slowly and consistently encroach on its years-long market share
leadership, and it struggled to defend its first-to-market
advantage in many market segments due to higher expense ratios on
The idea to roll out this Core ETF brand initiative in an effort
to compete on cost was timely, as investors have grown more aware
of the importance of ETF fees.
The move resulted in price cuts of as much as 65 percent on some
of its existing ETFs last fall, and the launch of
similar-but-cheaper funds-like the developing-markets fund IEMG-in
an effort to revitalize its footprint in the market.
IVV is now closing in on the SPDR Gold Trust (NYSEArca:GLD)-the
third-largest ETF, with $45.4 billion. GLD has been consistently
bleeding assets this year. SPY and the Vanguard FTSE Emerging
Markets ETF (NYSEArca:VWO) currently rank Nos. 1 and 2 on
IndexUniverse's latest "ETF Giants" table.
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