Canadian exchange-traded funds provider Horizons ETFs has reduced the management fee on its Horizons S&P 500 Index ETF (HXS) from 0.15% to 0.10%. The cut in management fee will contribute towards the fund’s accurate and stable performance versus the underlying index, the S&P 500.

Steve Hawkins, Co-CEO, Horizons ETFs.

An increasing number of studies have shown that the S&P 500 – the benchmark for US large cap stocks – is all but impossible for active managers to outperform consistently. This has led to an increased market for passive exposure over time, resulting in several fee reductions from leading ETF providers wishing to remain competitive amongst their peers.

Steve Hawkins, Co-CEO, Horizons ETFs, commented: “HXS is an award-winning US Equity ETF, with low tracking error, high tax-efficiency and now, a very competitive management fee. We think this is a winning combination for Canadian investors seeking index exposure to the S&P 500.”

Hawkins continued: “For taxable Canadian investors, HXS was already the most tax-efficient S&P 500 ETF listed in Canada and now with this lower management fee, its total after-tax return appeal will be even greater.”

State Street, who were the first to market with their SPDR S&P 500 ETF (SPY) launching in January 1993, currently charge a net expense ratio of 0.0945%. Low cost ETF provider Vanguard charges fees of 0.05% for the Vanguard S&P 500 ETF (VOO) while the Source S&P 500 UCITS ETF (SPXS) also has fees of 0.05%.

The ETF is listed on the Toronto Stock Exchange in both Canadian and US dollars (ticker: HXS.U). Launched on 30 November 2010, the ETF has returned 17.94% from inception to 29 February 2016, compared to 18.27% for the S&P 500 over the same period.