SSGA single-country ETFs adopt new indices and lower fees

Sep 19th, 2018 | By | Category: Equities

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State Street Global Advisors (SSGA) has announced changes to its line-up of single-country SPDR ETFs.

SSGA makes changes to single-country SPDR ETF suite

SSGA has lowered the fees on its single-country ETFs from 0.30% to 0.14%.

Four funds in the suite – providing exposure to equities in Canada, Germany, Japan, and the United Kingdom – have adopted new indices, names and tickers, and had their expense ratios lowered.

The funds will no longer track ‘Factor Mix’ indices – smart beta strategies that blend low volatility, quality and value exposures together in a single approach – from MSCI but instead track market-capitalization weighted indices designed by German index provider, Solactive.

The new fund names are as follows:

The SPDR MSCI Canada StrategicFactors ETF (QCAN US) has became the SPDR Solactive Canada ETF (ZCAN US) tracking the Solactive GBS Canada Large & Mid Cap Index.

The SPDR MSCI Germany StrategicFactors ETF (QDEU US) has become the SPDR Solactive Germany ETF (ZDEU US) tracking the Solactive GBS Germany Large & Mid Cap Index.

The SPDR MSCI Japan StrategicFactors ETF (QJPN US) has become the SPDR Solactive Japan ETF (ZJPN US) tracking the Solactive GBS Japan Large & Mid Cap Index.

The SPDR MSCI United Kingdom StrategicFactors ETF (QGBR US) has become the SPDR Solactive United Kingdom ETF (ZGBR US) tracking the Solactive GBS United Kingdom Large & Mid Cap Index.

The funds’ expense ratios have been cut by more than half, from 0.30% to 0.14%. They remain listed on NYSE Arca.

Single-country ETFs have become an area where issuers are increasingly competing on price after years of dominance by BlackRock’s iShares unit.

Franklin Templeton recently came out with country funds priced at 0.09% for developed markets and 0.19% for emerging markets, largely undercutting the competition. However, State Street’s well-established reputation and pedigree in the ETF space may make up for the 5 bp difference.

In addition index substitutions, SSGA has launched the SPDR Solactive Hong Kong ETF (ZHOK US) on NYSE Arca. This newest addition to the range provides exposure to large- and mid-cap equities listed in Hong Kong. The fund tracks the Solactive GBS Hong Kong Large & Mid Cap Index which weights stocks by their market capitalization.

As of the end of August 2018, the index comprised 58 securities. Sector exposure is mainly concentrated around financials (30.8%) and real estate (24.7%), followed by industrials (13.7%), utilities (11.8%), and consumer discretionary (11.4%). The fund has a large holding in AIA Group with a substantial weight of 19.3%. The next largest constituents are Hong Kong Exchanges & Clearing (6.4%), CK Hutchison (6.0%) and CLP Holdings (4.3%).

ZHOK also comes with an expense ratio of 0.14%.

“Investors are seeking traditional market-cap weighted beta indices when adding country-specific international exposures to their portfolios,” commented Noel Archard, Global Head of SPDR Product at State Street Global Advisors.

“Launching the SPDR Solactive Hong Kong ETF, while also changing the underlying indices and lowering the fees of four single-country SPDRs, provides our clients with an offering that is better aligned with their approach to single-country strategies.”

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