Several months ago, State Street Corporation's (STT) State Street Global Advisors (SSgA), the third largest U.S. issuer of exchange-traded funds (ETFs), made its presence felt in the ongoing ETF fee battle in significant fashion. The SPDR Portfolio ETFs, which SSgA debuted in October, are a suite of 15 previously existing SPDR ETFs that now carry ultra-low fees.

The fees on some of the SPDR Portfolio ETFs are so low that SSgA is not only competing with low-cost leaders such as Charles Schwab and Vanguard, but some of the SSgA Portfolio ETFs are the cheapest funds in their respective categories. Data indicate that SSgA's low-cost strategy is luring investors. (See also: Guide to ETF Providers: State Street Global Advisors.)

"Although Vanguard, iShares and Schwab have continually cut fees on broadly diversified index ETFs for years, SSgA had stayed out of the fray, even as advisors and investors increasingly flocked to these other low-cost funds," said CFRA Research Director of ETF and Mutual Fund Research Todd Rosenbluth in a note out Monday. "However, since the mid-October announcement, assets at SSgA's newly priced ETFs nearly doubled to $22 billion as of Feb. 20, 2018, according to Bloomberg data. In addition, they have gained some share against products in the same investment style."

For example, the SPDR Portfolio S&P 500 Value ETF (SPYV) charged 0.15% per year and had $361.5 million in assets under management prior to the October fee cut announcement. Today, SPYV has an annual expense ratio of just 0.04%, or $4 on a $10,000 investment, and has about $1.1 billion in assets. "In contrast, iShares S&P 500 Value (IVE) and Vanguard S&P 500 Value (VOOV), which own identical positions, but charge 18 and 15 basis points, respectively, gathered $220 million and zero assets in the same period" said Rosenbluth. "All three ETFs lost approximately 1% year to date through Feb. 20, 2018, after rising 15% in 2017." (For more, see: Minimizing ETF Fees.)

SPYV is one of 10 SPDR Portfolio ETFs that has seen assets more than double since the issuer lowered fees. Investors' enthusiasm for low-fee index funds and ETFs has been evident for years. Over the past 10 years, ETFs with annual expense ratios of 0.01% to 0.20% attracted more assets than four other price tiers combined.

The SPDR Portfolio Emerging Markets ETF (SPEM) is another example of a SPDR fund benefiting from a new, lower fee. SPEM's assets "nearly doubled to $1.6 billion, aided by more than $900 million of net inflows since its expense ratio decreased to 0.11%, from 0.59%, and it was added to a commission-free platform," said Rosenbluth. With the fee at 0.11%, SPEM is cheaper than rivals such as the highly popular Vanguard FTSE Emerging Markets ETF (VWO) and the iShares Core MSCI Emerging Markets ETF (IEMG). (For additional reading, check out: Fees Matter With Emerging Markets ETFs.)