SSGA cuts fees on European sector ETFs

Mar 9th, 2021 | By | Category: Equities

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State Street Global Advisors (SSGA) has lowered the fees charged on its suite of ETFs providing exposure to the various sectors of the European equity market.

SSGA cuts fees on SPDR European sector ETFs

SSGA’s sector ETF fee cut could collectively save investors around €1.75m at current asset levels.

Effective 9 March, each of the funds in the ten-strong suite will come with an expense ratio of 0.23%, down from 0.30%.

Sector ETFs are typically used by investors to implement sector rotation strategies or to effect simple adjustments to core equity exposures in light of changes in the economic cycle or market outlook.

SSGA’s offering is based on sector subindices of the MSCI Europe Index, an index comprising large and mid-cap stocks across 15 developed market countries and capturing approximately 85% of the total market capitalization across developed Europe.

There are ten ETFs in the suite, each based on one of the Global Industry Classification Standard (GICS) sectors: communication services, consumer discretionary, consumer staples, energy, financials, health care, industrials, materials, technology, or utilities.

Constituents are weighted by float-adjusted market capitalization subject to a cap of 35% on the largest position and a cap of 20% on any other stock.

Collectively, the suite houses some €2.5 billion in assets under management, translating to an annual saving of €1.75 million for investors at current asset levels. The largest fund is the SPDR MSCI Europe Financials UCITS ETF (FNCL LN) with €920m in assets. The SPDR MSCI Europe Health Care UCITS ETF (HLTH LN) and SPDR MSCI Europe Industrials UCITS ETF (NDUS LN) are also sizable with approximately €400m in assets each.

The funds maintain listings on London Stock Exchange, Euronext Paris, Deutsche Börse, and Borsa Italiana in euros, and on SIX Swiss Exchange in Swiss francs.

Cost-conscious investors are able to achieve slightly cheaper fees on some of the exposures via BlackRock‘s trimmed-down MSCI Europe sector suite. It offers six funds – priced at 0.18% – targeting the consumer discretionary, consumer staples, energy, financials, healthcare, and information technology sectors.

For a differently sliced and diced play on this theme, investors could look to Invesco, DWS, and Lyxor which offer sector ETFs based on the Stoxx Europe 600 Index. These funds are all priced at 0.30%.

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