State Street Global Advisors of Boston has slashed the management fee of its Standard & Poor's Depository Receipts Fund (SPDR) from 18 basis points to 12 basis points.

State Street will cap the fee at this rate for the next two years, the firm announced. The firm can offer the low rate because of the fund's tremendous growth, according to Liz Kennedy, a spokesperson for State Street. The Spider Fund, as it is nicknamed and widely known, has grown to $16.5 billion in assets under management, up 50 percent from $11 billion in assets under management a year ago, according to Kennedy.

State Street was also able to reduce the fees because the firm's costs have declined as a result of technological improvements it made to address potential Y2K problems, Kennedy said.

State Street charges an average of 55 basis points in management fees for its other exchange-traded funds, Kennedy said. The Spider Fund, introduced in 1993, was the first exchange-traded fund, State Street said in a statement.

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