SPDR S&P 500 ETF tops record $500 bln in assets as Nvidia soars

Smartpay Holdings

23/02/2024 22:24

By Suzanne McGee
       Feb 23 (Reuters) - A staggering rise in shares of
chipmaker Nvidia  .NVDA.O  helped the SPDR S&P 500 ETF Trust
 SPY.N  become the first exchange traded fund to top $500
billion in assets, market participants said. 
    The largest and most liquid fund tracking the Standard &
Poor's 500 index topped $500 billion on Thursday, according to
its issuer, State Street Global Advisors. It currently has about
$502 billion in assets.
    A sizeable chunk of those gains came from the surge in
Nvidia, whose heavy weighting in the S&P 500 gives it an
outsized influence on the index’s moves. The stock’s shares have
soared nearly 60% year-to-date, adding another 8.9% in the last
week alone, thanks to a post-earnings surge on Thursday. 
    “This is a result of Nvidia climbing to new highs rather
than of fresh demand for the ETF,” said Todd Rosenbluth, chief
ETF strategist at VettaFi.
    Nvidia, one of the so-called Magnificent Seven stocks that
have helped drive markets higher this year, has a weighting of
4.5% in the S&P 500. The index is up 6.7% year-to-date. 
    The company briefly hit $2 trillion in market value for the
first time on Friday, riding on an insatiable demand for its
chips that made the Silicon Valley firm the pioneer of the
generative artificial intelligence boom.
    While the SPDR ETF continues to dominate trading volumes and
liquidity and topped the list of ETFs with the largest inflows
last year, two other broad market ETFs have emerged as
challengers in recent years. 
    Flows into both BlackRock Inc.'s  BLK.N  iShares Core S&P
500 ETF  IVV.N  and the Vanguard S&P 500 ETF  VOO.N  have grown
at a faster rate over the last three years as a whole, data from
LSEG showed. 
    Together, the three ETFs now account for about $1.35
trillion of the $8.4 trillion of total assets invested in ETFs
in the U.S. Rosenbluth noted.

 (Reporting by Suzanne McGee; Additional reporting by Saqib
Iqbal Ahmed; Editing by Ira Ioseabshvili and David Gregorio)
 ((Suzanne.McGee@thomsonreuters.com; 917-285-4385;))