On this week’s episode of ETF Prime, VettaFi’s Todd Rosenbluth explains the significance of VOO surpassing SPY – even just for a short period. Additionally, Rosenbluth shares advisor polling data on fixed income. Finally, ETF industry veteran Dave Nadig offers his take on a private-public crossover ETF.
SPY Retakes Lead After Briefly Trailing VOO in AUM
The Vanguard 500 ETF (VOO) briefly overtook the SPDR S&P 500 ETF (SPY) last week as the world’s largest ETF by assets under management. This marked a significant milestone for Vanguard, the ETF industry, and was a sign of growing retail adoption.
“This was a tremendous milestone for [VOO] to initially pass [SPY], and I think it will pass again,” Rosenbluth said. “The Vanguard ETF tends to gather assets from buy and hold investors that are more strategic, retail, financial advisors. Whereas SPY, based on our understanding, is used by institutional investors. Market volatility, like we've had in the past week, is actually a good thing for people turning to SPY because of its liquidity and a tactical approach.”
See more: “VOO Surpasses SPY as World’s Biggest ETF”
Polling Highlights From VettaFi’s Q1 2025 Fixed Income Symposium
VettaFi hosts around six symposiums each year where it brings in asset managers to educate financial advisors. Polling data from VettaFi’s Q1 2025 Fixed Income Symposium revealed some interesting insights into advisor preferences fixed income market sentiment.
“People tend to lean in on their expertise in the equity markets, and lean on others within the fixed income marketplace. I think many advisors are looking for guidance and help,” Rosenbluth said.
Due to their lack of confidence in predicting fixed income markets, many investors are more comfortable working with an active manager.
When asked what percentage of average client fixed income portfolios have active management, 18% of respondents said less than 10%, 36% said between 10%--25%, 24% said between 25%--50%, and 22% said more than 50% of their average client fixed income portfolio is in active funds.
“Historically, money has stayed in fixed income mutual funds for that very reason, whereas money is bled out of equity mutual funds and into ETFs. The fixed income mutual fund asset base has been more loyal,” Rosenbluth said.
However, the supply of active fixed income ETFs on the market is growing, and they are quickly gaining market share. Rosenbluth sees room for growth, and sees many active fixed income investors leaning into the ETF wrapper more now.
Rosenbluth said interest in municipal bonds is currently higher than it's ever been, based on his experience. In response, there has been significant product development in the active muni bond space.
“A lot more active fixed income municipal bond ETFs have come to market in the last year or two, and they're performing well,” Rosenbluth said. These include the Goldman Sachs Municipal Income ETF (GMUB) and the T. Rowe Price Intermediate Municipal Income ETF (TAXE).
Exchange Is Just 4 Weeks Away
VettaFi is hosting Exchange, a financial services conference for advisors on March 23 through March 26 in Las Vegas. Currently, there are over 1,300 registered attendees so far, with more than half being advisors with CRDs.
Advisors can expect topics covered such as best practice tips for advisors and portfolio strategy sessions.
Rosenbluth said he is excited that not only will the conference have experts from the asset management industry, such as Cohen & Steers, TCW, and Global Advisors, but advisors and ETF strategists will be there to share their own views on the equity and fixed income marketplace.
“Advisors will get to hear from other advisors about how they're building portfolios in this environment,” Rosenbluth added.
Looking Under the Hood of XOVR
The top holding in the ERShares Private-Public Crossover ETF (XOVR) is SpaceX (which is not publicly traded on any stock exchanges), weighing about 10% as of February 25.
“They're not doing anything against the rules. The rules for ETF and mutual funds say that any fund can have up to 15% of its assets in what are considered illiquid securities, which I believe means you can't dump it in seven days without expecting market impact,” Nadig said.
“They're doing all the things that they legally have to do,” Nadig added. “Here's the problem: they're marketing the fund primarily as a SpaceX delivery vehicle.”
To get SpaceX exposure, XOVR bought a special purpose vehicle, which is run by another company.
“We have absolutely no idea what, if any, fees are being accrued in that special purpose vehicle. Most SPVs charge a significant amount of money for this service of going out to the private market,” Nadig said. “The company has been unwilling to say anything about that.”
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