Daily ETF Watch: State Street Cuts 41 Fund Fees

The price cuts reflect an overall trend of fee compression in the ETF arena.

Reviewed by: Heather Bell
Edited by: Heather Bell


State Street Global Advisors said on Tuesday that it was cutting fees on 41 of its SPDR ETFs. With 146 SPDR-branded ETFs currently trading on the U.S. market, that amounts to price cuts on a little less than 30 percent of the firm’s total lineup.


While firms frequently announce reductions or increases in fees for their ETFs due to shifts in the amounts of assets under management, SSgA’s latest round of fee cuts is the result of a recent strategic review.


According to SSgA Chief Operating Officer Nick Good, as part of that effort, the ETF provider has also built up various teams within its structure, including sales, strategic relationships, thought leadership, product management, capital markets and institutional outreach.


“The changes are part of a continuous review process to identify improvements that are beneficial to investors,” the press release noted.


The largest fund in the mix appears to be the SPDR Barclays Short Term Corporate Bond ETF (SCPB | A-98), which has $3.7 billion in assets under management and saw its expense ratio shaved by 1 basis point to 0.12 percent.


However, the vast majority of the funds on the list are much smaller than that, with assets under $1 billion, such as the SPDR MSCI EM Beyond BRIC ETF (EMBB | F-57), which has less than $3 million in AUM and saw its expense ratio cut by 6 basis points to 0.49 percent.


The SPDR S&P 1500 Momentum Tilt ETF (MMTM | B-87) and the SPDR S&P 1500 Value Tilt ETF (VLU | B-88), with $17 and $8 in AUM, respectively, received the greatest price cuts, with their expense ratios falling from 0.35 percent to 0.12 percent, a drop of 23 basis points.


Interestingly, those cuts bring the prices of MMTM and VLU below those of the iShares MSCI USA Momentum Factor ETF (MTUM | A-59) and the iShares MSCI USA Value Factor ETF (VLUE | B-86), which both charge 0.15 percent.


"We will always look at price as one of the ways to deliver value to our clients," Good said in a telephone interview with ETF.com when asked if there would be more price cuts to follow.


The full list of affected funds is available in the original press release.


Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.