Tag Archives: bill gross

ETF Fees-BlackRock Leads Race To Zero

November 11, 2015 MarketsMuse Curator Leave a comment

Unless you are Rip Van Winkle, you don’t need to be a MarketsMuse to know that the primary value proposition put forth by the ETF industry has always been: “Lower Fees Vs. Mutual Funds!” Yes, the secondary ‘advantage’ is “liquidity,” given that investors can move in and out of exchange-traded-funds throughout the trading day, whereas mutual funds are priced on an end-of day basis.

Well, Issuers of exchange-traded funds are now eating their own lunches, as competing Issuers are now pursuing a “race-to-zero” path when it comes to administration fees—adding a further crimp to the mutual fund industry’s marketing complex—which is being rocked by allegations from PIMCO’s former top honcho Bill Gross who has alleged in a recent lawsuit that PIMCO’s administrative fees are equal to the management fees the firm charges (but, that’s another story!)

Courtesy of today’s column by WSJ’s Daisy Maxey ETF Fees: “The Arms Race to Nothing”, the story at hand is worth two in the bush…here’s an excerpt:

BlackRock Inc. exchange-traded fund can now claim the title of the lowest-cost stock exchange-traded fund—but it probably won’t have that distinction to itself for long.

BlackRock, the largest global provider of ETFs, on Tuesday cut fees on seven of its iShares Core ETFs. That included trimming the annual expenses of the $2.7 billion iShares Core S&P Total U.S. Stock Market ETF to 0.03% of assets from 0.07%, bumping a pair of Charles Schwab Corp. ETFs from the lowest-cost spot.

Within hours, Schwab vowed to match the cut on its $4.9 billion Schwab U.S. Large-Cap ETF, which currently has expenses of 0.04%.

“Our intention has always been to be the price leader in the ETF space, and we’re going to maintain that,” said a spokesman for Schwab, who didn’t give an exact time frame for the company’s planned move.

Low fees have been one of the big attractions of ETFs and providers have competed fiercely to whittle down their charges by additional hundredths of a percentage point. The latest cuts by BlackRock are being viewed as a challenge to Vanguard Group, the No. 2 in ETF assets, as well as a sign of the success of BlackRock’s iShares Core ETF lineup, launched three years ago.

The giants of the ETF business are BlackRock, with $818 billion in U.S. ETF assets under management; Vanguard, at $479 billion; and State Street Global Advisors, the asset-management business of State Street Corp. , at $418 billion, according to Thomson Reuters Lipper. Schwab is a distant No. 7, with $38 billion in U.S. ETF assets, according to Thomson Reuters Lipper.

BlackRock’s iShares Core ETFs, which now number 20, are marketed as simple and low-cost portfolio building blocks.

The lineup has grown to $160 billion in assets as of Sept. 30, according to BlackRock.

For the full story from WSJ, click here

ETF News, Fixed Income, People Profiles

Bond Guru Gundlach Launches Actively-Traded Bond ETF

February 24, 2015 MarketsMuse Staff Reporter Leave a comment

MarketsMuse update profiling the debut of bond guru and DoubleLine Capital’s founder Jeff Gundlach’s first foray into the ETF space is courtesy of ETF.com.The SPDR DoubleLine Total Return Tactical ETF (TOTL) is launching today (Tuesday, Feb. 24).

The $TOTL exchange-traded fund invests in just about every type of debt security, including investment-grade and junk debt—both sovereign and corporate—from issuers around the globe. The portfolio management team is led by none other than Gundlach himself, and will be advised by State Street, according to the prospectus. TOTL costs a net of 55 basis points in expense ratio, or $55 per $10,000 invested.

Gundlach, founder of Los Angeles-based DoubleLine Capital, is one of the most well-known fixed-income investors in the market today, but until now an absent presence in the quickly growing ETF market.

Partnership With SSgA

Last summer, he joined forces with State Street Global Advisors to bring to market an actively managed bond ETF that would go head-to-head with the Pimco Total Return ETF (BOND | B), which at the time was still managed by Bill Gross. Gross has since left Pimco to join Janus.

Replicating BOND’s success will be no small feat, considering that BOND gathered its first $1 billion in assets in less than three months after launch, and grew to become one of the biggest active bond ETFs in the market. BOND’s success was part Gross himself, part a solid track record of outperformance. TOTL has a powerhouse name behind it, but performance only time will tell. Continue reading →

ETF News

Bill Gross Hire Further Bolstered by Janus; Announces Purchase of ETF Firm VelocityShares

October 13, 2014 MarketsMuse Staff Reporter Leave a comment

Janus Capital Group Inc. said Monday it agreed to acquire exchange-traded product firm VelocityShares for at least $30 million.

The acquisition comes on the heels of Janus’ hiring of Bill Gross, one of the most successful bond investors in history, from Pacific Investment Management Co., the firm he co-founded in 1971. It positions Janus, a traditional mutual fund provider, in the fast-growing exchange-traded fund market.

“This acquisition positions Janus within the rapidly growing rules-based and active ETF universe, enhancing the customized solutions we can provide to our clients and enabling us to work with the growing segment of financial advisers and institutions focused on these instruments,” said Richard M. Weil, the Janus chief executive, in a statement.

Denver-based Janus will pay an “initial upfront cash consideration of $30 million” to buy VelocityShares parent company VS Holdings Inc. The Darien, Conn.-based firm manages $2 billion in ETFs.

Through the acquisition, Janus is adding clients including hedge funds as well as mutual and pension funds. Janus shares have risen 26 percent since Gross announced he would work for the Denver-based firm on the expectation that he would attract new investors to the company’s funds.