Industry Updates

State Street undercuts BlackRock in global equity ETF price war

The SPDR ACWI IMI ETF has more than halved its total expense ratio

Theo Andrew


State Street Global Advisors (SSGA) has slashed the fees on its all-country world index (ACWI IMI) ETF, undercutting its closest rival BlackRock.

Effective 3 April, the SPDR MSCI ACWI IMI UCITS ETF (SPYI) will see its total expense ratio (TER) cut from 0.40% to 0.17%, below the iShares MSCI ACWI UCITS ETF (SSAC) TER of 0.20%.

The move is the latest sign of a price war in the European ETF market as issuers look to attract greater flows.

SPYI has gathered significantly fewer flows than SSAC so far this year, recording $26.8m inflows versus $626m for the BlackRock product, according to data from ETFLogic.

The difference is even starker over a 12-month period, with SSAC posting inflows of $2.2bn compared to $50m for SPYI.

However, the two ETFS are not a direct comparison, with the $490m SPYI tracking small, mid and large-cap stocks versus just large and mid-cap for SSAC.

A more suitable comparison would be the SPDR MSCI ACWI UCITS ETF (SPYY), which currently houses $2.5bn assets under management (AUM), versus $6.9bn for SSAC. SPYY's TER will remain at 0.40%.

The other ETF in the space is the $901m Lyxor MSCI All Country World UCITS ETF (ACWL) which has gathered $8m since the turn of the year. It carries a TER of 0.45%.

SSGA has cut fees on several products recently in a bid to bring fees more in line with its rivals. Last November, the US giant more than halved the fee on its emerging market ETF, the SPDR MSCI Emerging Market UCITS ETF (SPYM), from 0.42% to 0.18%.

In 2021, SSGA cut fees on its suite of sector ETFs from 0.30% to 0.18%.

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