The Vanguard S&P 500 ETF (VOO) has staged a strong comeback this year and is nearing its all-time high of $561. It has moved into a bull market after soaring by 25% from its lowest point in April. It is hovering at its highest swing since February 21st.
VOO ETF inflows are surging
The Vanguard S&P 500 Index ETF has become one of the fastest-growing funds in Wall Street in terms of inflows. It has had over $66 billion in inflows this year alone, bringing its total assets to $608 billion.
Most importantly, VOO has already overtaken the SPDR S&P 500 ETF in terms of assets. SPY, which has long dominated the S&P 500 Index space, has $606 billion assets as it shed over $28 billion.
The main reason for this divergence is that VOO is much cheaper than the SPY. VOO has an expense ratio of 0.03%, while the SPY charges 0.09%. These numbers mean that a $10,000 investment in the two will cost $3 and $9, respectively.
While these are small numbers, analysts recommend the cheaper VOO or IVV since they all invest in a similar index.
Analysts are bullish on the S&P 500 Index
The VOO ETF stock has jumped as analysts express a bullish outlook for US equities. Tom Lee, the founder of FundStrat, and one of the most popular analysts, said that the S&P 500 bull run started on April 7 when US equities plunged following the Liberation Day speech.
Lee believes that the index will surge from $6,000 to $6,600 by the end of the year. First, he suspects that the Federal Reserve will move from being a headwind this year into a tailwind. In this, he suspects that next year will see several interest rate cuts, which could provide a catalyst to the stock market.
Second, there are chances that the trade war concerns will moderate in the coming months. US and Chinese officials are meeting in London this week to negotiate a deal that will lower these tensions.
The US is also negotiating with many other powers, like Japan, the European Union, and South Korea.
Corporate earnings will likely be strong this year despite the tariffs. That’s because many will adjust their prices to deal with these tariffs this year.
A report by FactSet showed that the earnings growth rate is expected to be 4.9% in the second quarter. This will be the slowest growth rate since Q4’23. This slowdown will then start rising in the coming months.
Looking ahead, the next catalyst to watch will be the upcoming US inflation data on Wednesday. Economists expect the data to show that the headline Consumer Price Index (CPI) rose to 2.5%, while the core CPI rising to 2.8%.
VOO ETF stock analysis
The daily chart shows that the VOO stock price bottomed at $443 in April this year, moving to a high of $550. It has moved above the 50-day and 200-day Weighted Moving Averages (WMA).
The stock is about to form a golden cross pattern, which happens when the two lines cross each other. Also, the Relative Strength Index (RSI) and the MACD have continued rising.
Therefore, the stock will likely continue rising as bulls target the year-to-date high of $562, up by 2% from the current level.
The VOO ETF will need to move above that level to invalidate the double-top pattern at $562. A move above that level will point to more gains, potentially to $600.
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