State Street Global Advisors (SSGA) has reduced the expense ratios on several US-domiciled ‘SPDR Portfolio’ ETFs which are designed to deliver ultra-low-cost, core portfolio exposures.

Sue Thompson, Head of SPDR Americas Distribution at State Street Global Advisors.

First introduced in 2017, the SPDR Portfolio ETF suite now houses more than $151 billion in assets under management across 22 funds that deliver cheap, straightforward access to mainstream equity and fixed income asset classes.

Effective 1 August 2023, ten ETFs within the suite had their expense ratios lowered such that they became the lowest-cost, or amongst the lowest-cost, within their respective categories.

Despite core portfolio ETFs already charging near-rock-bottom fees, competition remains fierce amongst low-cost ETF providers with BlackRock, Vanguard, Charles Schwab, and SSGA regularly trimming a few extra basis points from the price tags of their core products.

In terms of the latest fee reductions, the ten SPDR Portfolio ETFs deliver a range of equity (US large-cap, US mid-cap, US small-cap, developed world ex-US, Europe, and emerging markets) and fixed income (short-term, intermediate-term, and long-term US Treasuries, and high yield) exposures.

Following the fee cuts, the ETFs now come with expense ratios ranging from just 0.02% to 0.07%.

While each ETF has had its expense ratio lowered by just one to five basis points, the funds in question are relatively substantial in terms of assets under management, ranging in size from $470 million to $19.9 billion. Collectively, they house $78.1bn.

Of particular note is the $19.9bn SPDR Portfolio S&P 500 ETF (SPLG US) which has seen its expense ratio trimmed from 0.03% to 0.02%, making it the cheapest ETF to track the flagship US large-cap equity index, the S&P 500.

The ten funds are listed below alongside their AUM and new expense ratios:

SPDR Portfolio S&P 500 ETF (SPLG US); $19.9bn; 0.02%
SPDR Portfolio S&P 400 Mid Cap ETF (SPMD US); $7.1bn; 0.03%
SPDR Portfolio S&P 600 Small Cap ETF (SPSM US); $8.5bn; 0.03%
SPDR Portfolio Developed World ex-US ETF (SPDW US); $16.9bn; 0.03%
SPDR Portfolio Europe ETF (SPEU US); $470m; 0.07%
SPDR Portfolio Emerging Markets ETF (SPEM US); $7.7bn; 0.07%

SPDR Portfolio Short Term Treasury ETF (SPTS US); $5.3bn; 0.03%
SPDR Portfolio Intermediate Term Treasury ETF (SPTI US); $3.9bn; 0.03%
SPDR Portfolio Long Term Treasury ETF (SPTL US); $7.0bn; 0.03%
SPDR Portfolio High Yield Bond ETF (SPHY US); $1.3bn; 0.05%

Commenting on the fee cuts, Sue Thompson, Head of SPDR Americas Distribution at State Street Global Advisors, said: “Low-cost ETFs are attractive to buy and hold investors who want to limit the impact of fees on the long-term performance of their portfolios. With 22 funds across a broad range of asset classes, SPDR Portfolio ETFs are designed to help investors build resilient and diversified portfolios that allow them to keep more of what they earn. In fact, in the last two years, State Street Global Advisors has reduced expense ratios on 20 ETFs across our US line-up, demonstrating our commitment to the democratization of investing by delivering institutional quality investment solutions at competitive price points.

“Educating investors and advisors about how ETFs can help to reduce total cost of ownership is a key focus for State Street Global Advisors. We are pleased to be able to make investing in ETFs even more affordable, especially for newer investors who are just getting started and those using ETFs to build a core portfolio. We believe that as the core is typically the largest part of a portfolio, it’s important to use cost-effective solutions over the long term.”