State Street Global Advisors (SSGA) has cut fees on 15 of its exchange traded funds (ETF) to the ultra-low level of 0.03%, helping it surpass Vanguard as the lowest cost offering on the market.
Vanguard, which is the second largest ETF provider in the world after BlackRock’s iShares, previously offered the cheapest ETF, with its S&P 500 product carrying an annual fee of 0.04%.
State Street has applied the fee changes to 15 of its existing funds, covering $11 billion of assets under management.
In order to cut costs to these levels, three of the funds have been moved from external benchmarks to in-house indexes. (See table 1)
‘We are truly excited to be able to offer ultra-low-cost ETFs to investors. Since launching SPY nearly 25 years ago, State Street Global Advisors has continually looked for opportunities to help investors build better portfolios with ETFs,’ said Nick Good, co-head of the Global SPDR business at SSGA.
‘Investors have been asking us to provide these solutions to offer them a greater choice for low cost ETFs. The launch of the SPDR Portfolio ETFs provides a solution that meets this growing demand.’
SSGA 15 lower fee ETFs will be available under new tickers. (See table 2)