David Fabian, Benzinga Staff Writer
ETFs are leading the revolution in offering investors new ways to access capital markets through unique indexes and low-cost strategies.
This year alone there have been more than 100 new ETFs brought to market that are continuing to fuel the trend of investors eschewing mutual funds in favor of sleeker investment vehicles.
Despite this growth in new products, the top three exchange-traded funds by asset size are still anchored in some of the most well-known and established indexes in existence. These include:
SPDR S&P 500 ETF (SPY) - $169 billion
It’s no surprise that SPY is the largest fund by assets, as it was the first ETF to be introduced back in 1993. Since that time, it has been adopted by millions of investors as a low-cost method of gaining exposure to the most well-known benchmark on the planet: the S&P 500.
SPY is also one of the most liquid indexes in existence as well. It currently trades average daily volume of 82 million shares, which translates to more than $16 billion changing hands during each trading session.
In addition, the net expense ratio of SPY is listed at a modest 0.095 percent. That means for every $10,000 invested, you get exposure to the 500 largest and most liquid stocks in the U.S. for just $95 a year.
iShares Core S&P 500 ETF (IVV) - $59 billion
As a result of the unquestionable success of SPY, iShares introduced IVV in 2000 as a means of tracking the same underlying index. However, this ETF charges a somewhat smaller fee of 0.07 percent annually. At the end of the day, their track record, liquidity and holdings will be nearly identical and choosing between the two may come down to transaction costs or fund company preference.
iShares MSCI EAFE ETF (EFA) - $56 billion
Lastly, EFA tracks a broad range of companies in Europe, Australia and the Far East. This ETF contains more than 900 stocks in both developed and emerging market countries overseas, with the largest exposure being a 20% allocation to Japan. EFA was introduced in 2001 and charges an expense ratio of 0.33 percent.
Oftentimes being first to market in a particular niche of the ETF space translates into a tremendous advantage in gathering new assets. These stalwart holdings have proven the success story of low-cost indexing year after year.
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