Price War


BOSTON, Mass. - State Street Global Advisors plans to drop fees on its S&P index fund below those of Vanguard, according to a recent SEC filing.

Fees for the SSgA S&P 500 (symbol SVSPX) will shrink to less than .18% per year, the figure Vanguard currently charges for managing its Vanguard S&P 500 (symbol VFINX) fund, which this year became the largest mutual fund in the world. As assets grow, State Street's fees could slide to less than .17%, according to the company's filing. The bank hopes to pool assets from other institutions to help achieve that.

For many years, Vanguard remained one of the lowest-cost funds available to individual investors, which helped it to gain a strong following and enjoy word-of-mouth marketing.

For long-term investors, keeping management fees down is considered important on core investments because the effects of annual compounding can be large over time.

State Street Global Advisors is an index fund group operated by State Street Bank. Staff