MarketMuse update profiles BlackRock’s huge slash in investing cuts to cause pressure on rival is courtesy of Reuters’ Simon Jessop 10 March story “1-British ETF price war heats up with BlackRock FTSE 100 fee cut”
BlackRock, the world’s largest asset manager, has slashed the cost of investing in Britain’s oldest FTSE 100 exchange-traded fund, ratcheting up the pressure on rival providers such as Vanguard.
Demand for exchange-traded funds (ETFs) has surged in recent years as a result of often anaemic returns from more actively managed funds.
BlackRock said on Tuesday that it would now charge 7 pence a year per 100 pounds invested in its ETF that pays out dividend income, down from 40 pence previously, to make it the cheapest such tracker on the market. Both Vanguard and Deutsche Bank charge 9 pence, it said.
“It really doesn’t leave much more room to fall, but I don’t think the price war has ended,” said Adam Laird, head of ETFs at fund supermarket Hargreaves Lansdown. “In the U.S., you can get mainstream ETFs with fees as low as 0.03 percent.”
However, he said he expected rival providers to wait and see if clients switched their money before responding.
The iShares FTSE 100 UCITS ETF (Dist) fund was the first ETF to launch on the London Stock Exchange in 2000 and currently holds 3.8 billion pounds ($5.7 billion) of assets under management.
To read the entire story on how BlackRock is starting a war with its competitors from Reuters, click here.
