SSGA cuts fees across core equity and fixed income ETFs

Sep 30th, 2014 | By | Category: ETF and Index News

State Street Global Advisors (SSgA), one of the world’s leading issuers of exchange-traded funds with its SPDR brand, has announced a reduction in fees across its core equity and fixed income ETF range.

SSGA cuts fees across core equity and fixed income ETFs

Investors will pay, on average, 20% lower fees across SSgA’s core ETF range.

The news marks another checkpoint in the industry-wide trend towards lower fees which ultimately benefits the end investor and adds increased pressure on the active management industry to compete on price.

According to SSGA, the reduction in fees will result in investors, on average, paying 20% less across the 15 core equity and fixed income ETFs with the largest reduction being made on the SPDR S&P 500, down from 15 basis points to 9 basis points as of 1 October 2014.

SSgA has also proposed a merger of its 13 French domiciled ETFs onto a single, centralised structure in Ireland and will issue and settle via an international central securities depository (ICSD) through Euroclear. This structure should benefit from reduced operational costs and risks, improved liquidity, tightened bid-ask spreads and the creation of a simpler, more precise process for all parties.

Commenting on the changes, Alexis Marinof, head of SPDR ETFs for EMEA, said: “In recent times, we have seen the popularity of ETFs as an asset class increase considerably, moving into the mainstream investment arena as a result of the changing needs of investors in the current economic environment.”

He added: “Our objective is to be at the forefront of change and innovation in the ETF market and use our wealth of expertise and experience in this industry to add value to our clients. The changes are aimed at providing our clients with an enhanced offering that matches their needs as well as the needs of a maturing European marketplace.”

Continued improvements in the operational and market efficiency of large scale issuers such as SSgA are playing a large part in the growth of the European ETF industry.  By offering investors a simple, low-cost way to gain broadly diversified market exposure, it can be expected that the ETF structure will continue to attract assets as investors embrace the high-quality and transparent nature of these funds.

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