BlackRock cuts fees on $200bn worth of ETFs

Apr 14th, 2022 | By | Category: ETF and Index News

BlackRock has trimmed the expense ratios on seven US-listed ETFs providing a range of mainstream equity and fixed income exposures.

BlackRock cuts fees on $200bn worth of ETFs

Investors in the seven ETFs stand to save approximately $32.7m per year in annual management fees at current AUM levels.

While most of the fee cuts are of a magnitude of only one or two basis points, the ETFs in question are substantial.

The funds benefiting from reduced fees range in size from $870 million to $83.5 billion in assets under management. Collectively, they house $199.1bn.

Following the fee cuts, investors in the ETFs stand to save approximately $32.7m per year in annual management fees at current AUM levels.

The largest amongst the seven funds, the $83.5bn iShares Core US Aggregate Bond ETF (AGG US), has had its expense ratio lowered from 0.04% to 0.03%. The fee cut makes AGG cheaper than its main rival, the $81.9bn Vanguard Total Bond Market ETF (BND US), which is priced at 0.04%.

Both ETFs track the Bloomberg US Aggregate Bond Index, a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. The index includes securities issued by government, corporate, and securitized issuers globally.

The cheapest ETF offering USD aggregate bond exposure, however, is the $280m BNY Mellon Core Bond ETF (BKAG US) which comes with zero management fees.

BlackRock has also sliced one basis point off the $3.7bn iShares Core International Aggregate Bond ETF (IAGG US), from 0.08% to 0.07%. The fund tracks an index composed of non-US-dollar-denominated investment-grade bonds from multiple fixed income sectors globally.

The other most notable fee reduction has been applied to the $72.6bn iShares Core MSCI Emerging Markets ETF (IEMG US) which has seen its expense ratio shrink two basis points from 0.11% to 0.09%. Despite the move, IEMG is still one basis point more expensive than the $73.8bn Vanguard FTSE Emerging Markets ETF (VWO US).

The $30.1bn iShares Core MSCI Total International Stock ETF (IXUS US) and $7.1bn iShares Core MSCI International Developed Markets ETF (IDEV US) have had their expense ratios lowered by two and one basis points, respectively. IXUS and IDEV, which provide exposure to large, mid, and small-cap stocks from global ex-US and global developed ex-US equity universes, respectively, now come with fees of 0.07% and 0.04%.

Finally, BlackRock has also reduced the expense ratio of the $1.2bn iShares MSCI USA Multifactor ETF (LRGF US) from 0.20% to 0.08% and halved the fee on the $870m iShares MSCI International Multifactor ETF (INTF US) to 0.15%. LRGF and INTF provide exposure to US and global developed ex-US stocks while tilting portfolio weights so as to maximize exposure to value, momentum, quality, and low size factors.

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