State Street Undercuts BlackRock, Vanguard With Cheapest S&P ETF

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e asset manager announced Tuesday that it lowered expense ratios on ten ETFs with $78 billion in assets, including the $20 billion SPDR Portfolio S&P 500 ETF (ticker SPLG), according to a press release. SPLG’s new fee of just two basis points clocks in a hair below the three basis points charged by the $357 billion iShares Core S&P 500 ETF (IVV) and the $340 billion Vanguard S&P 500 ETF (VOO).

It’s an aggressive volley by State Street, which helms the $434 billion SPDR S&P 500 ETF Trust (SPY), the oldest and largest ETF. Even still, the asset manager has been ceding market share in the $7.6 trillion industry for two decades. Tiny fee cuts have become common as issuers battle for flows in an increasingly saturated market, with the likes of BlackRock, Vanguard and Charles Schwab Corp. unleashing similar reductions of just a couple basis points over the past few years.

“In the ETF world, even one basis point can move the needle on flows,” said Eric Balchunas, senior ETF analyst at Bloomberg Intelligence. “I suspect this will help SPLG, although likely not to the point where it is a real threat to the Three Amigos — SPY, IVV, VOO.”

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