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State Street slashes ETF fees as competition heats up

State Street has ramped up the competition among the biggest US ETF providers by slashing prices across 15 ultra-low cost trackers.


Louise Hill

The asset manager revealed it would slash the cost of some of the 15 newly-launched ETFs to just 0.3% and claims the rest are priced “equal to or below the lowest fee ETF in the category” at the time of launch.

Growing price pressures in the ETF industry have seen the likes of Vanguard and BlackRock cut fees in order to attract business, with State Street’s latest move believed to be in response to the intense competition.

The firm has also attempted to make savings by creating indexes which three of the ETFs will use to track US large caps, small caps and the total equity market instead of the Russel indices.

Nick Good, co-head of the global SPDR business at State Street, said investors had asked for a lower-cost option.

He said: “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.”

“The launch of the SPDR Portfolio ETFs provides a solution that meets this growing demand.”

The 15 ETFs hold a combined $11bn in assets and cover fixed income, US equity, emerging markets and international equity.