Key Takeaways
- • State Street Investment Management announced on Oct. 30, 2026 a new mutual fund share class, SPYMX, that gives employer-sponsored and state-sponsored retirement plans, including 401(k) and 403(b) plans, access to the SPYM S&P 500 ETF's underlying exposure.
- • SPYM, formerly ticker SPLG, has an expense ratio of 0.02% and holds roughly $186 billion in AUM, following its $100 billion milestone in December 2025, according to Pensions & Investments.
- • State Street is reversing the common industry approach by adding mutual fund share classes to an ETF, rather than launching dual ETF share classes off existing mutual funds, to tap defined contribution plan assets.
- • U.S. large-cap exposure accounts for about 30% of DC plan assets, totaling more than $4 trillion, half of which sits in mutual funds, per State Street.
- • SPYM remains well behind Vanguard's VOO ($1.7 trillion) and BlackRock's IVV ($889 billion), and analysts question how quickly it can close the gap.
Summary
State Street Investment Management is expanding distribution of SPYM, its low-cost S&P 500 ETF, into retirement plans through a new mutual fund share class, SPYMX. The firm announced the launch on October 30, 2026, according to Pensions & Investments. The share class will be available to eligible employer-sponsored and state-sponsored retirement plans, including 401(k) and 403(b) plans, as well as other institutional investors. SPYMX will offer the same underlying exposure as the SPYM ETF through a shared portfolio structure, which State Street says will let retirement investors benefit from the scale and existing liquidity of the ETF.
The move follows SPYM's selection as the default investment for Trump accounts. With nearly 70 million children signed up for Trump accounts, of which 60 million have been auto-enrolled, the source notes SPYM is positioned for further growth. SPYM has grown rapidly this year, now hovering around $186 billion after reaching $100 billion in December of last year. It also holds the record for the fastest ETF to move from $50 billion to $100 billion in AUM. The fund's expense ratio was cut to 0.02% from 0.03% in 2023.
State Street's approach runs counter to the majority of asset managers, which are focused on launching dual ETF share classes off existing mutual funds. The firm is pursuing the reverse path because mutual funds remain the preferred vehicle in defined contribution plans. Anna Paglia, executive vice president and chief business officer at State Street, had previously said the firm would launch mutual fund share classes of its most popular ETFs. A spokesperson for SSIM told P&I that the firm is not currently announcing plans for additional mutual fund share classes of existing ETFs. Paglia said in a statement: "Retirement investors shouldn't have to choose between the operational familiarity of a mutual fund and the scale and efficiency associated with an ETF." According to State Street, U.S. large-cap exposure accounts for about 30% of DC plan assets nationally, more than $4 trillion in total, with half held in mutual funds.
Despite these gains, SPYM remains far behind Vanguard's VOO, with $1.7 trillion in AUM, and BlackRock's IVV, with $889 billion. Aniket Ullal, head of ETF research and analytics at CFRA Research, said Vanguard has a large lead but that State Street could catch up, particularly given SPYM's lower expense ratio. Daniel Sotiroff, associate director of ETF and passive strategies research, told P&I in July that flows into SPYM from Trump accounts are likely to be gradual and depend on account adoption, and that the accounts alone would not close the multi-trillion-dollar AUM gap needed to catch Vanguard or BlackRock.
The move follows SPYM's selection as the default investment for Trump accounts. With nearly 70 million children signed up for Trump accounts, of which 60 million have been auto-enrolled, the source notes SPYM is positioned for further growth. SPYM has grown rapidly this year, now hovering around $186 billion after reaching $100 billion in December of last year. It also holds the record for the fastest ETF to move from $50 billion to $100 billion in AUM. The fund's expense ratio was cut to 0.02% from 0.03% in 2023.
State Street's approach runs counter to the majority of asset managers, which are focused on launching dual ETF share classes off existing mutual funds. The firm is pursuing the reverse path because mutual funds remain the preferred vehicle in defined contribution plans. Anna Paglia, executive vice president and chief business officer at State Street, had previously said the firm would launch mutual fund share classes of its most popular ETFs. A spokesperson for SSIM told P&I that the firm is not currently announcing plans for additional mutual fund share classes of existing ETFs. Paglia said in a statement: "Retirement investors shouldn't have to choose between the operational familiarity of a mutual fund and the scale and efficiency associated with an ETF." According to State Street, U.S. large-cap exposure accounts for about 30% of DC plan assets nationally, more than $4 trillion in total, with half held in mutual funds.
Despite these gains, SPYM remains far behind Vanguard's VOO, with $1.7 trillion in AUM, and BlackRock's IVV, with $889 billion. Aniket Ullal, head of ETF research and analytics at CFRA Research, said Vanguard has a large lead but that State Street could catch up, particularly given SPYM's lower expense ratio. Daniel Sotiroff, associate director of ETF and passive strategies research, told P&I in July that flows into SPYM from Trump accounts are likely to be gradual and depend on account adoption, and that the accounts alone would not close the multi-trillion-dollar AUM gap needed to catch Vanguard or BlackRock.
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