Today we will witness a financial revolution that Wall Street hasn't seen since 1993 — about the time when Bill Clinton was president, and there was only one ETF. And its name was SPY — powerful, unyielding, liquid as whiskey in a Goldman Sachs bar. It was the first, it was the best. And everything was going smoothly until BlackRock and Vanguard came along with the words: 'Why is this throne alone, when there are three of us?'
State Street: Yesterday's king, today — a retiree in a deck chair?
SPY, the king of liquidity and favorite of institutions, is sweating under the pressure of competitors today. Eric Balchunas from Bloomberg (by the way, he is not a leftist — you can trust him!) stated that BlackRock iShares is literally on the verge of surpassing SPY in trading volume. It's like if FedEx suddenly overtook UPS.
Here's a shock: IVV from BlackRock and VOO from Vanguard together have taken almost all the young blood of investors because — they are cheaper. That is, people actually looked at the fees and said: 'Why are we paying 0.09% when we can pay 0.03%?'
Shame on you, SPY. Shame.
Vanguard: The silent killer with minimal fees
And now pay attention: Vanguard VOO has already surpassed SPY in assets under management (AUM). What does this mean? It means that a revolution has taken place on Wall Street, but in the spirit of Swiss banks: quietly, dryly, and carefully.
Vanguard never aimed to be on the cover of the Financial Times. They are like a librarian with a bazooka — quietly sitting in the corner, but when they come, it's total destruction. BlackRock: The Dark Lord of liquidity.
But BlackRock is something else. This is Darth Vader of finance, with AUM in trillions and control over almost every corner of the global economy. Now they are targeting the SPY throne. And, according to Balchunas, trading volumes are already almost equal. It's like if TikTok became more popular than CNN. Although… okay, that already happened.
Is it irony? Sure.
Look: BlackRock is ready to overtake SPY in trading volume, while Vanguard has already surpassed both of them in asset size. Some might say: 'This is market evolution.' And some (me) would say: 'This is the financial Game of Thrones, and kings fall quickly here.'
And what does this mean for the average investor?
• If you hold SPY — congratulations, you are an old-school investor. You are respected, but you pay a little more than you should.
• If you have VOO or IVV — you are smart, cold, and calculating. You invest as if you are playing chess with the IMF's money.
• If you have Dogecoin — what are you even doing here?
The Finale
The ETF industry is undergoing a quiet revolution, and the big players are fighting not for life, but for trading volume. Ironic? Indeed. The one who is ready to become the king of trading (BlackRock) may end up being second in assets. And the one who looks like a modest nerd (Vanguard) turns out to have already taken the crown.
