State Street to Cut Fees on European Version of SPDR

State Street Global Advisors is set to offer the cheapest ETF in Europe after slashing the fees on its S&P 500 product by two-thirds.

On Nov. 1, the total expense ratio for the $5.5 billion SPDR S&P 500 UCITS ETF (SPY5) will be cut from 0.09% to 0.03%, the cheapest S&P 500 ETF on the European market, undercutting the Invesco S&P 500 UCITS ETF and its 0.05% expense ratio.

The move comes as part of a triple fee reduction across SSGA’s UCITS S&P 500 line of funds. The expense ratio of the SPDR S&P 500 EUR Hdg UCITS ETF (SPPE) will drop from 0.12% to 0.05% and the SPDR S&P 500 ESG Leaders UCITS ETF (SPPY) from 0.10% to 0.03%.

Lowest Fees in Europe

Following the changes, State Street Global Advisors will also offer Europe’s lowest-fee currency-hedged and ESG S&P 500 ETFs.

The world’s third-largest ETF issuer noted U.S. equities currently account for more than 60% of global equity indexes, with Europe-domiciled ETFs investing close to $15 billion a year in U.S. equities over the past decade.

It added the upcoming reductions bring the firm’s total fee reductions over the past two years to 20 across its global ETF roster.

 “These changes are significant for our professional investor base,” Matteo Andreetto, head of SPDR EMEA business at State Street Global Advisors, said. “This is the latest example of our work to make these products even more accessible and affordable without compromising on quality.

“While these announcements enhance our market competitiveness, they also demonstrate our commitment to improving accessibility; delivering institutional quality investment solutions at competitive price points.”

SPY5’s fee is now a third of the $390 billion SPDR S&P 500 ETF Trust (SPY) in the U.S., the world’s largest ETF, which has an expense ratio of 0.09%.

The fee reduction will be enacted within days of State Street Global Advisors commencing securities lending on SPY5 and 43 other ETFs on Oct. 27.