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State Street slashes ETF fees to offer the cheapest S&P 500 trackers in Europe

23 October 2023

State Street Global Advisors will cut its fees on three S&P 500 ETFs domiciled in Europe next month.

By Emma Wallis,

News editor, Trustnet

State Street Global Advisors is upping the stakes in the race to offer European investors the cheapest available exchange-traded funds (ETFs). On 1 November it will cut the total expense ratios (TERs) on three of its S&P 500 trackers, including an ESG strategy, making them the lowest cost physically replicated S&P 500 ETFs domiciled in Europe.

The $4.2bn SPDR S&P 500 UCITS ETF and the $821m SPDR S&P 500 ESG Leaders UCITS ETF will go from TERs of 9 and 10 basis points (bps) respectively to charging just 3bps (0.03%).

That is half the cost of the next-cheapest ETFs tracking the US stock market. Fidelity Index USHSBC American Index and Xtrackers S&P 500 UCITS ETF all have an ongoing charges figure (OCF) of 0.06%.

For British investors, the £4.7bn Fidelity Index US and the £10.6bn HSBC American Index ETFs offer sterling share classes, whereas SPDR S&P 500 UCITS ETF and SPDR S&P 500 ESG Leaders UCITS ETF are US dollar-denominated strategies.

Costs for the slightly more expensive $5.5bn SPDR S&P 500 EUR Hdg UCITS ETF will be cut from 12bps to 5bps. Although there is a small additional cost for investors wanting to hedge their currency exposure into euros, it still ranks as one of the cheapest ETFs tracking the S&P 500 on offer to European investors.

This latest move to cut costs is part of a broader initiative at State Street Global Advisors, which has reduced the expense ratios on more than 20 ETFs globally in the last two years.

Matteo Andreetto, head of SPDR EMEA business at State Street Global Advisors, said the cost reductions would “deliver institutional quality investment solutions at competitive price points.”

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