Sign up to create alerts for Instruments,
Economic Events and content by followed authors
Free Sign Up Already have an account? Sign In
Quotes
All Instrument Types
- All Instrument Types
- Indices
- Equities
- ETFs
- Funds
- Commodities
- Currencies
- Crypto
- Bonds
- Certificates
Please try another search
Investors lost 37% by missing this ONE signal 😵
Read now
State Street Intensifies ETF Fee War
By Zacks Investment ResearchStock MarketsOct 17, 2017 11:57PM ET
www.investing.com/analysis/state-street-intensifies-etf-fee-war-200219653
State Street Intensifies ETF Fee War
By Zacks Investment Research | Oct 17, 2017 11:57PM ET Since the launch of the first ETF almost 24 years back, the exchange traded fund industry has attained great heights. There are currently about 2,029 exchange traded products listed in the U.S., with almost $3.24 trillion in assets under.
Several strategies have emerged, including active management, smart-beta technique, thematic ETFs and many more. Some of these did see success and but many have failed to attract investors’ attention. But one attribute has been famous among investors since the start, i;e, investors’ craving for low expense ratio management (read: Will Low Cost ETF Strength Make Vanguard Top Asset Manager Soon?).
For a long period of time, the lowest cost corner of the market was dominated by Charles Schwab (NYSE:SCHW) and Vanguard. But several other issuers are looking for a bigger pie in the ETF market and to that end have slashed their fees considerably in recent times. Among them, BlockRock and Fidelity deserve a special mention (read: BlackRock Slashes Fees, ETF Price War Intensifies).
As a result, State Street’s ETF operations failed to keep up with its key peers so far in 2017. State Street has hauled in $13.5 billion in net ETF inflows in the first nine months of this year while BlackRock has amassed about $194 billion and Vanguard has recorded $112 billion in new ETF business, as per ETFGI, quoted on Financial Times.
SPDR S&P 500 (MX:SPY) (AX:SPY) charging 9 bps in fees lost about $7.45 billion in assets so far this year whileiShares Core S&P 500 ETF IVV charging 4 bps in fees added about $25.3 billion and Vanguard S&P 500 ETF VOO gained about $10.4 billion in assets. In order to remain competitive, State Street ‘repackaged’ 15 prevailing ETFs with very low expense ratios.
source: etf.com
Bottom Line
Competition in the ETF market is cut throat. So, the expense ratio war is likely to continue in the near term. Several asset managers are ready to further reduce fees to attract investors’ fund and gain market share. So, the latest move by State Street should help it gain assets in the coming days.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
SPDR-SP 500 TR (SPY (NYSE:SPY)): ETF Research Reports
VANGD-SP5 ETF (VOO): ETF Research Reports
ISHARS-SP500 (IVV): ETF Research Reports
Original post
Zacks Investment Research
Related Articles
Why Tesla Stock Has Fallen Over 45% Since December 2024
By Timothy Fries - Mar 10, 2025
6
Tesla (NASDAQ:TSLA) (NYSE: TSLA), the electric vehicle giant, has recently experienced a significant drop in its stock value, which has fallen nearly 45% since December. This...
Gold Miners Have Been Cast Aside—But Smart Money May Be Rotating in
By Gary Tanashian - Mar 10, 2025
Through many years of frustration among gold bugs due to the failure of gold stock prices to leverage the gold prices in a positive way, there were very clear reasons for that...
S&P 500, Russell 2000 Break Key Trendlines - Deeper Correction Ahead?
By Declan Fallon - Mar 10, 2025
I know there is the smell of fear in the air when I see my readership double as we reach a point where weekly chart factors come into play. Up until last week, markets have...
State Street Intensifies ETF Fee War
Add Chart to Comment
Confirm Block
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
Report this comment
I feel that this comment is:
Comment flagged
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.