As the exchange traded fund industry continues to expand and attract more assets, fund providers have been able to lower expenses, often undercutting the competition. State Street Global Advisors recently lowered its fees by 1 basis point on all its sector ETFs in what appears to be a growing competitiveness in garnering a greater piece of the market share.
According to an SEC filing, SSgA lowered the expense ratios on all nine of its sector ETFs to 0.18%:
- Consumer Discretionary Select Sector SPDR Fund (NYSEArca: XLY)
- Consumer Staples Select Sector SPDR Fund (NYSEArca: XLP)
- Energy Select Sector SPDR Fund (NYSEArca: XLE)
- Financial Select Sector SPDR Fund (NYSEArca: XLF)
- Health Care Select Sector SPDR Fund (NYSEArca: XLV)
- Industrial Select Sector SPDR Fund (NYSEArca: XLI)
- Materials Select Sector SPDR Fund (NYSEArca: XLB)
- Technology Select Sector SPDR Fund (NYSEArca: XLK)
- Utilities Select Sector SPDR Fund (NYSEArca: XLU)
The timing of SSgA’s actions appears to be a response to Vanguard‘s commitment to lower expenses. However, Dan Dolan, Director of Wealth Management Strategies for the Select Sector SPDR Trust, stated that the decision was made based on their asset growth and economies of scale.
“The economy notwithstanding, 2011 was a banner year for us, both in terms of the increase in our average assets and the growth in our overall year-end assets,” Dolan said in a press release.
In December, Vanguard announced that it lowered the expense ratios on its line of sector funds to 0.19% each:
- Vanguard Consumer Discretionary ETF (NYSEArca: VCR)
- Vanguard Consumer Staples ETF (NYSEArca: VDC)
- Vanguard Energy ETF (NYSEArca: VDE)
- Vanguard Financials ETF (NYSEArca: VFH)
- Vanguard Health Care ETF (NYSEArca: VHT)
- Vanguard Industrials ETF (NYSEArca: VIS)
- Vanguard Information Tech ETF (NYSEArca: VGT)
- Vanguard Materials ETF (NYSEArca: VAW)
- Vanguard Telecommunication Services ETF (NYSEArca: VOX)
- Vanguard Utilities ETF (NYSEArca: VPU)
For more information on market sectors, visit our sector ETFs category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.