BlackRock Slashes Fees, ETF Price War Intensifies

The ETF industry is witnessing phenomenal growth and currently, commands assets under management of $4.1 trillion. Thanks to growing competition in the ETF business, there has been a race to the bottom with regard to costs in order to gain market share.

While many issuers have entered the fray, the lowest cost corner of the market is generally dominated by Charles Schwab and Vanguard. However, several other issuers are looking for a bigger pie in the ETF market and to that end have slashed their fees considerably. Earlier this year, Fidelity slashed fees equally across 11 sector ETFs to 8.4 bps from 12 bps, marking a decrease of 3.6 bps. The discounts came as part of a broader fee reduction in Fidelity’s offerings.

The world’s largest asset manager, BlackRock Inc. has also announced a series of fees cuts. As per a SEC filing by iShares division at BlackRock, fees are being slashed for nine ETFs including two core ETFs, six multifactor ETFs and a short-term bond ETF. This is the second time BlackRock has announced fee cuts for ETFs. In October, it had cut price for 15 core ETFs including iShares Core S&P 500 ETF (IVV - Free Report) . Prior to this, in November 2015, BlackRock slashed the expense ratio for iShares Core S&P Total Stock Market ETF (ITOT - Free Report) to mere 0.03%.

In its latest bout of fees cuts, BlackRock lowered the fees for some of the ETFs by as much as 20 basis points. Here are the 15 ETFs that witnessed fees cuts:

Multifactor ETFs

iShares Edge MSCI Multifactor USA ETF (LRGF - Free Report)   - from 0.35% to 0.20%
iShares Edge MSCI Multifactor USA Small-Cap ETF (SMLF - Free Report)   - from 0.50% to 0.30%.
iShares Edge MSCI Multifactor Intl ETF (INTF - Free Report) - from 0.45% to 0.30%
iShares Edge MSCI Multifactor Intl Small-Cap ETF (ISCF Free Report)   - from 0.60% to 0.40%
iShares Edge MSCI Multifactor Emerging Markets ETF (EMGF Free Report) - from 0.65% to 0.45%
iShares Edge MSCI Multifactor Global ETF (ACWF Free Report) - from 0.50% to 0.35%.

Core ETFs

iShares Core Russell U.S. Growth ETF (IUSG - Free Report) - from 0.07% to 0.05%

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