The oldest exchange-traded fund listed in the U.S. has just been surpassed in assets under management by a Vanguard ETF that more cheaply tracks the S&P 500 index.

Vanguard’s flagship S&P 500 fund takes the No. 1 position from State Street’s SPY, the world's oldest ETF, a reordering marking a major transition in index investing.

Vanguard has unseated State Street for the title of the world’s biggest exchange-traded fund, ushering in a new world order for the $11 trillion industry.

Vanguard Group's Standard & Poor's 500 ETF is on the edge of finally seizing the title of the world's largest exchange-traded fund from rival State Street Global Advisors' product, the SPDR S&P 500 Trust ,