SPLG Subtly Earns Inflows Win as VOO, SPY Race Continues

With so much focus on the driving forces behind the massive growth of the Vanguard S&P 500 ETF (VOO) and its battle with the SPDR S&P 500 ETF Trust (SPY) to claim the title of world's largest exchange-traded fund, it might be easy to overlook the SPDR Portfolio S&P 500 ETF (SPLG).With a value of approximately $58 billion, SPLG could only be described as small if compared to the two $600 billion-plus ETFs vying for the top spot.But against that backdrop, etf.com data reveals that SPLG stands out as leading both VOO and SPY when it comes to relative fund flows.The etf.com Pulse Tool shows that since the start of the year, when VOO began narrowing the gap between SPY, SPLG has experienced more than $3 million worth of inflows, which equals 0.0052% of the ETF’s assets.By comparison, VOO’s nearly $21 billion worth of inflows represents 0.0034% of the ETF’s assets. Meanwhile, the $630 billion SPY has experienced $8.2 billion worth of outflows this month.How SPLG Stacks Up Against VOO, SPYBased purely on inflows this year, SPLG ranks fourth among all ETFs in the etf.com database, behind VOO, the $471 billion Vanguard Total Stock Market ETF (VTI) with $3.8 million worth of inflows, and the $326 billion Invesco QQQ Trust (QQQ), which has garnered $3.2 million worth of inflows.However, on a percentage-of-assets basis, SPLG tops the inflow leaders.It is difficult to pinpoint the exact reason for SPLG’s surging popularity among investors, but it is safe to assume fees play a part. And once fees join the conversation, one must assume financial advisors are behind a good portion of the asset movement.Still, there are a few nuances to explain the ongoing appeal of SPY, which charges nine basis points, even when stacked up against VOO charging three basis points.“It’s simple; you use SPY if you’re looking for an option strategy, because SPY has a more robust options market, and you use VOO if you’re simply looking for S&P 500 exposure,” said Chuck Failla, principal at Sovereign Financial Group in Stamford, Connecticut. But even beyond the options factor, which would make SPY the more attractive ETF for larger institutions and sophisticated traders, VOO holds an edge for its structure as an open-end ETF.Unlike SPY, structured as a Unit Investment Trust, VOO’s structure allows for more immediate reinvestment of dividends, which presumably provides a slight compounding advantage. Thus, VOO is courting the types of financial advisors who are working with individual investors with long-term objectives.And that brings us back to SPLG, which is also an open-end ETF, but the expense ratio comes in even lower than VOO at just two basis points.In essence, while all eyes are fixated on the heated race between VOO and SPY, SPLG is still far back in the pack, but certainly coming on strong for all the right reasons.