BlackRock, the asset manager behind the iShares range of ETFs, has slashed the fees charged on four of its mainstream benchmark trackers. The move sees issuer’s clients enjoy cheaper access to popular international, European, and emerging market equity indices, and brings the cost of the funds in line with its main competitors.
The fee reductions represent significant savings for investors looking for mainstream equity exposures.
BlackRock said in a statement: “European equities and emerging market equities are core building blocks in our clients’ portfolios, and are increasingly used as an efficient alternative to futures and equity swaps. These price changes reflect our ability to use the scale of BlackRock’s platform to create efficiencies for clients.”
The firm’s ‘Core’ ETFs are designed to be low-cost portfolio building blocks and suitable as long-term holdings in investors’ portfolios.
BlackRock has previously noted that its core range is one of the fastest-growing segments within its ETF line-up in terms of net inflows.
The ETFs receiving the fee reductions are giants in their own right, each possessing over $1 billion in assets under management.
The $5.2bn iShares MSCI Europe UCITS ETF (IMEU LN) has had its total expense ratio (TER) reduced from 0.35% to 0.12%.
The $2.0bn iShares MSCI EMU UCITS ETF (CEU LN) has had its TER reduced from 0.33% to 0.12%.
The $5.6bn iShares Euro Stoxx 50 UCITS ETF (CSX5 LN) has had its TER reduced from 0.16% to 0.10%.
The $10.1bn iShares Core MSCI EM IMI UCITS ETF (EIMU LN) has had its TER reduced from 0.25% to 0.18%.
The fees charged by the three European equity exposure ETFs now match those of similar funds offered by BlackRock’s main rival Vanguard.
Its $2.0bn Vanguard FTSE Developed Europe UCITS ETF (VEUD LN), $1.3bn Vanguard FTSE Developed Europe ex-UK UCITS ETF (VERX LN), and $11.6bn Vanguard Euro Stoxx 50 UCITS ETF (VX5E LN) have TERs of 0.12%, 0.12%, and 0.10% respectively.
The emerging markets fund, however, has been priced below that of the comparable fund from Vanguard – the $1.6bn Vanguard FTSE Emerging Markets UCITS ETF (VDEM LN). The Vanguard fund costs 0.25%, the same price as EIMU before the fee cut.
BlackRock isn’t the only ETF issuer cutting fees. In March Lyxor unveiled it range of core ETFs, with some funds priced as low as 0.04%. The firm is the cheapest amongst the three providers to offer exposure to the Euro Stoxx 50 Index with the $110 million Lyxor Core Euro Stoxx 50 UCITS ETF (MSED LN) charging fees of 0.07%.