State Street Chops Fees On 41 SPDR ETFs

State Street on Tuesday slashed fees on 41 SPDR ETFs by as much as half.

“Our primary focus is on helping investors build stronger portfolios while positioning SPDR ETFs for long-term growth,” said James Ross, global head of SPDR ETFs, in a press statement.

The $ 897 million SPDR Barclays Aggregate Bond (ARCA:LAG) saw its expense ratio drop from 0.21% to 0.10%. The drop brings its cost more in line with iShares Core Total Bond (ARCA:AGG). AGG tracks the same underlying index but charges only 0.08% in expenses.

The price cuts extended across funds investing in both international and domestic stocks as well as equity and fixed-income asset classes.

No sooner did State Street announce the move than a hashtag popped up on social media: #feewars.

In January, Vanguard overtook State Street as the No. 2 ETF firm by assets. Investors have flocked to the Pennsylvania-based firm’s index funds built on a buy-and-hold philosophy. A passive indexing style helps the firm keep expenses as low as 0.05% on some of its most popular products. It also structures fees so that they come down as assets increase.

Vanguard currently has $ 441.75 billion in ETF assets, according to Morningstar. Boston-based State Street’s SPDR ETFs hold $ 431.51 billion.

BlackRock’s iShares ETFs continue to dominate with $ 774.55 billion in assets. In 2014, the ETF provider expanded its lineup of low-cost iShares Core ETFs.

Announcing the price cuts, State Street seemed to fend off suggestions that its move was a response to the so-called fee war.

“Competitive pricing is a core benefit to the SDPR ETF value proposition that dates back to the launch of the SPDR S&P 500 ETF in 1993,” Ross said.

He added: “Investors should look beyond a fund’s expense ratio to fully understand its total cost of ownership.”

A full list of ETFs affected by the price cuts is here.

State Street on Tuesday slashed fees on 41 SPDR ETFs by as much as half.

“Our primary focus is on helping investors build stronger portfolios while positioning SPDR ETFs for long-term growth,” said James Ross, global head of SPDR ETFs, in a press statement.

The $ 897 million SPDR Barclays Aggregate Bond (ARCA:LAG) saw its expense ratio drop from 0.21% to 0.10%. The drop brings its cost more in line with iShares Core Total Bond (ARCA:AGG). AGG tracks the same underlying index but charges only 0.08% in expenses.

The price cuts extended across funds investing in both international and domestic stocks as well as equity and fixed-income asset classes.

No sooner did State Street announce the move than a hashtag popped up on social media: #feewars.

In January, Vanguard overtook State Street as the No. 2 ETF firm by assets. Investors have flocked to the Pennsylvania-based firm’s index funds built on a buy-and-hold philosophy. A passive indexing style helps the firm keep expenses as low as 0.05% on some of its most popular products. It also structures fees so that they come down as assets increase.

Vanguard currently has $ 441.75 billion in ETF assets, according to Morningstar. Boston-based State Street’s SPDR ETFs hold $ 431.51 billion.

BlackRock’s iShares ETFs continue to dominate with $ 774.55 billion in assets. In 2014, the ETF provider expanded its lineup of low-cost iShares Core ETFs.

Announcing the price cuts, State Street seemed to fend off suggestions that its move was a response to the so-called fee war.

“Competitive pricing is a core benefit to the SDPR ETF value proposition that dates back to the launch of the SPDR S&P 500 ETF in 1993,” Ross said.

He added: “Investors should look beyond a fund’s expense ratio to fully understand its total cost of ownership.”

A full list of ETFs affected by the price cuts is here.

Investor’s Business Daily – Investing RSS

You may also like...