Advisors and investors poured an impressive $115 billion of new money into ETFs in July. That further proves the industry's relentless pace, even during summer months. Heading into August, with over $680 billion of net inflows YTD, the ETF industry is on track to surpass the $1 trillion mark again. It will likely set a new calendar year record. (Data as of July 30.)
S&P 500 ETFs Further Swell in Size
Broad U.S. market exposure via ETFs continues to dominate. The Vanguard S&P 500 ETF (VOO) is leading the way, by attracting $12 billion in July. With $72 billion in net inflows through the first seven months, VOO is on pace to exceed its 2024 record of $116 billion.
VOO is not alone in its popularity while providing S&P 500 exposure. The SPDR S&P 500 ETF (SPLG), the SPDR S&P 500 ETF (SPY), and the iShares Core Core S&P 500 (IVV) were among the top 10 ETF asset gatherers in July. Combined, the trio gathered $12 billion as investors continued to embrace these market-cap-weighted products.
However, for investors concerned that Nvidia and Microsoft each represent more than 7% of S&P 500 ETFs (with Apple not far behind), there are many alternative index-based ETFs to consider. The following is just a sample of what's available.
Equal Weighting Made Simple
Rather than owning shares of 500 companies based on their market capitalization, investors can opt for an equal stake in each. The Invesco S&P 500 Equal Weight ETF (RSP) offers precisely this. It holds stakes in the same companies as VOO and its peers, but with a different exposure profile.
Following its latest quarterly rebalance, Nvidia and Microsoft's weighting in RSP is roughly equivalent to that of Advanced Micro Devices and TE Connectivity. As a result, RSP's exposure to the information technology sector (14% of assets) is significantly lower than VOO's (34%). Instead, it offers greater exposure to sectors like industrials (15% vs. VOO's 8.6%). Indeed, VOO's exposure to Nvidia alone nearly matches its entire industrials sector allocation.
