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State Street Cuts Fees on Europe’s S&P 500 ETFS, Bolstering Market Competitiveness

Published 23/10/2023, 12:54
© Pavlo Gonchar / SOPA Images/Sipa via Reuters Connect
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State Street Global Advisors (SSGA), a division of State Street Corporation (NYSE:STT), has announced significant fee reductions across its suite of Europe-based S&P 500 Exchange-Traded Funds (ETFs), including the SPDR S&P 500 UCITS (LON:SPX5) ETF (SPY5), the SPDR S&P 500 (NYSE:SPY) EUR Hdg UCITS ETF, and the SPDR S&P 500 ESG Leaders UCITS ETF. Starting from November 1, these funds will offer the most cost-effective physically replicated S&P 500 ETFs in Europe.

Notably, SPY5's total expense ratio (TER) will drop from 0.09% to 0.03%, making it Europe's cheapest ETF and outperforming competitors such as Invesco's S&P 500 UCITS ETF, which carries a TER of 0.05%. This change is part of a broader fee reduction strategy across SSGA's UCITS S&P 500 suite, making them the lowest-fee currency-hedged and ESG S&P 500 ETFs in Europe.

The move aligns with the trend of Europe-domiciled ETFs investing around $15bn annually in US equities, accounting for over 60% of global equity indices. Matteo Andreetto, head of SPDR EMEA business at SSGA, emphasized that these changes would enhance market competitiveness and accessibility to institutional quality investment solutions without compromising quality.

Andreetto also highlighted the growing importance of US equities post-Global Financial Crisis. European investors have shown increased interest in US equity ETFs, investing an average of $15bn per year over the past decade.

The fee cut on SPY5 is particularly noteworthy as it is a third of the $390bn SPDR S&P 500 ETF Trust (ASX:SPY), the world's largest ETF launched by State Street 30 years ago. SSGA, known for its pioneering role in index, ETF, and ESG investing, has now reduced fees on 20 ETFs across its global portfolio. The firm manages $3.69 trillion in assets and offers a comprehensive family of SPDR ETFs.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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