You Might Be Paying Too Much for That Index Fund

State Street last month slashed the fee on its cheapest S&P 500 exchange-traded fund, known by ticker symbol to 0.02%—making it less than a quarter of the cost of its popular SPY fund that tracks the same stocks. An individual investor can now build a fully balanced portfolio using ETFs without paying more than 0.05% in total fees, said Susan Thompson, head of SPDR Americas distribution at State Street, compared with around a 1% average fee 20 years ago. Fees make a huge difference over a long time horizon: A $1 million account invested for 40 years would save about $370,000 in fees at a 0.05% fee versus a 1% fee, according to a State Street analysis.