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

FILE PHOTO: NVIDIA HGX AI Supercomputer on display during the annual Foxconn Tech Day in Taipei

By Suzanne McGee

(Reuters) - A staggering rise in shares of chipmaker Nvidia helped the SPDR S&P 500 ETF Trust 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 iShares Core S&P 500 ETF and the Vanguard S&P 500 ETF 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)