Industry Updates

State Street S&P 500 ETF doubles to $10bn since fee cut

$10.3bn AUM

Theo Andrew

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State Street Global Advisors’ (SSGA) S&P 500 ETF has doubled in size since it slashed its fees late last year.

The SPDR S&P 500 UCITS (SPY5) now houses over $10.3bn assets under management (AUM), growing from just over $5bn since it reduced its fee from 0.09% to 0.03% on 23 October.

SPY5 has seen $4.2bn in the four months to 23 February, according to data from Morningstar Direct, with the remaining AUM coming from market gains.

The flagship US index is up 20.6% over the same period an impressive run that saw it hit an all-time high at the end of January.

The S&P 500 has continued its rally, gaining 2.1% on 22 February following chip giant Nvidia’s blockbuster earnings, its best day since January 2023.

Even without the gains, SSGA’s fee cut has succeeded in peaking investor interest in the ETF as it booked $1.2bn inflows in the month after it reduced the total expense ratio (TER).

The move saw the US giant undercut its rivals to offer the cheapest S&P 500 ETF in Europe, pricing it below the Invesco S&P 500 UCITS ETF (SPXS) which has a TER of 0.05%.

SSGA incorporated SPY5 into its securities lending programme – along with 66 other ETFs – in a bid to make the move more economically viable.

Despite the move, investors have been quick to point out the need to consider the total cost of ownership when selecting ETFs, taking into account factors such as liquidity, spreads, tracking error and replication methodology.

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