State Street Global Advisors (SSgA) has announced the European launch of the SPDR S&P 500 ETF (SPY5), a locally domiciled version of its flagship US SPDR product.
SSgA has launched a European domiciled version of its flagship SPDR S&P 500 ETF charging just 0.15% per annum.
The US-listed product is the largest and most actively traded ETF in the world with almost $95 billion in assets under management and trading an average of over 183 million shares daily.
The new UCITS-structured SPDR S&P 500 ETF will be primarily listed in Germany, effective 20 March, but is registered for sale in the UK, Netherlands, France, Ireland and Italy. Additional cross-listings are planned.
The physically-backed ETF allows for a cost-efficient way to transfer assets from the US version of the S&P 500 to the new UCITS-compliant product. In addition, the same portfolio management team that has managed the US product for the last 19 years will manage the UCITS structured ETF in Europe.
Commenting on the listing, James Ross, senior managing director and global head of SPDR ETFs at SSgA, said: “The SPDR S&P 500 is well-recognised by many investors. The case for investing is straightforward – instant and easy access to one of the world’s premier indexes tracking 500 large cap US stocks diversified across a range of sectors.”
The US version of the SPDR S&P 500 was the first commercially successful ETF, created in 1993 and is today the largest and most actively traded ETF in the world. Within three years of its launch, it had amassed over $2 billion in assets as investors started to understand the core benefits of the exchange traded fund structure, namely diversification, cost-efficiency, and liquidity.
The S&P 500 Index is a float-adjusted, capitalisation-weighted index of the top 500 companies in the US market. The index is designed to provide exposure to the large cap segment of the US equities market and spans over 24 separate industry groups. It captures approximately 75% of the market capitalisation of US equities.
SPDR S&P 500 ETF will compete against a swathe of existing European S&P 500 Index funds, including the following listed on the London Stock Exchange:
iShares S&P 500 ETF (IUSA)
iShares S&P 500 Monthly GBP Hedged ETF (IGUS)
S&P 500 Source ETF (SPXS)
DB X-trackers S&P 500 ETF (XSPX)
Lyxor ETF S&P 500 (LSPU)
Credit Suisse S&P 500 ETF (CSPX)
HSBC S&P 500 ETF (HSPX)
Amundi ETF S&P 500 (500U)
However, with a Total Expense Ratio (TER) of just 0.15% pa, the fund is cheaper than its rivals and should make progress gathering assets.
SSgA now has 36 SPDR ETFs listed on European exchanges including the London Stock Exchange, Deutsche Börse, Euronext Paris, SIX Swiss Exchange and Borsa Italiana.