The iShares S&P 500 AUD ETF (ASX: IVV) rose 6.46% in October as United States shares continued their strong run this year.

The ASX IVV is trading at $58.76 per unit, down 1.19% today but up 26.12% in the year to date.

This compares to a 6.8% increase in the S&P/ASX 200 Index (ASX: XJO) (excluding dividends) in 2024.

The ETF hit a new all-time high of $59.56 on Wednesday.

What is the iShares S&P 500 ETF (IVV)?

The ASX IVV seeks to mirror the returns of the S&P 500 Index (SP: .INX) before fees. This gives investors exposure to the 500 largest listed US companies by market capitalisation.

The top five holdings of the ASX IVV are Apple Inc (7.23%), Microsoft Corp (6.53%), Nvidia Corp (6.1%), Amazon.com Inc (3.55%), and Meta Platforms Inc (2.55%).

Just over 30% of the ETF's holdings are technology stocks.

What's driving the ASX IVV higher?

Data from the ASX and Vanguard shows that 56% of investor cash inflows into Australian exchange-traded funds (ETFs) over the first three quarters of 2024 went to international shares ETFs.

All up this year, investors have ploughed $23.3 billion into ASX ETFs.

ETFs, which are baskets of stocks, are becoming increasingly popular because they are easy to trade and offer instant diversification.

Vanguard said investors prefer international shares ETFs today because US shares are outperforming.

Adam DeSanctis, Vanguard's Head of ETF Capital Markets, Asia-Pacific, commented:

The appetite for international equity ETFs by investors is not subsiding and continues to outpace the inflows into Australian equity ETFs and other industry segments.

… a high percentage of investors see ETFs as the quickest and lowest-cost way to access different types of asset classes and offshore markets.

According to the Association of Superannuation Funds of Australia (ASFA), Aussie superannuation funds are also increasingly investing in international assets to strengthen their diversification and returns.

AFSA research shows that 49% of all Australian superannuation savings are now allocated to international assets such as shares, compared to 35% a decade ago.

What's next for US shares?

In a new note published this week, Blackrock's Global Chief Investment Strategist, Wei Li, noted that US shares hovered near record highs last week.

A surge in the Telsa Inc share price after its Q3 corporate earnings announcement set the stage for more mega-cap tech earnings this reporting season.

Li said her team was overweight on US shares for now, commenting:

We are overweight given our positive view on the AI theme.

Valuations for AI beneficiaries are supported as tech companies keep beating high earnings expectations. We think upbeat sentiment can broaden out.

Falling inflation is easing pressure on corporate profit margins.

The ASX IVV has an annual management fee of just 0.04%. This means it is among the 10 cheapest ASX ETFs on the market.