BlackRock cuts fees on $14bn in ETFs
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BlackRock has shaved up to 10 basis points off the fees on eight ETFs, including a family of target-risk strategies and a popular floating-rate bond product, filings show.
The new expense ratios went into effect immediately, according to disclosures.
The ETFs represented a combined $14bn in assets as of September 30, according to Morningstar Direct.
BlackRock chopped 10bp off four multi-asset ETFs that invest in other iShares ETFs. Fees fell to 15bp on the $1.9bn iShares Core Growth Allocation ETF, $1.8bn iShares Core Moderate Allocation ETF, $1.5bn iShares Core Aggressive Allocation ETF and $971m iShares Core Conservative Allocation ETF, disclosures show.
Fees also dropped 10bp, to 30bp on the $651m iShares US Infrastructure ETF.
In addition, BlackRock sliced 6bp, or 40 per cent, off the $452m iShares MSCI USA Equally Weighted ETF. The new expense ratio stands at 9bp.
Expenses on the $490m iShares GNMA Bond ETF, meanwhile, dropped by a third, to 15bp, the disclosures show.
The largest ETF included in the cuts, the $6.6bn iShares Floating Rate Bond ETF, has had a 5bp fee reduction, to 15 bps.
The cuts were a part of a regular product review process, BlackRock noted in a product update provided to clients on Wednesday.
“These expense ratio reductions reflect our continued desire and ability to use the scale of BlackRock’s platform to deliver quality and value for clients,” the update said.
Company executives said last week that the manager would continue to invest in its ETF business to sustain strong growth. iShares generated net sales of $58bn in the third quarter, with more than half of the flows in “strategic” products, such as fixed-income and environmental, social and governance strategies, they noted.
During the first nine months of this year, BlackRock’s ETFs globally have attracted more than $200bn in net flows, surpassing sales for all 12 months of 2020, chief executive Larry Fink noted on last week’s earnings call.
“We are seeing this momentum across the entire ETF industry as more and more investors discover the convenience, the efficiency and the transparency that the ETF vehicle has,” he added. “We see opportunities well beyond the 30m people who use our ETFs today.”
That growth allowed BlackRock to cut fees on more than a dozen ETFs last month. The company in March slashed fees by as much as 85 per cent on a suite of style ETFs.
All of the ETFs included in the fee reductions except for the GNMA Bond ETF recorded positive net sales during the first nine months of 2021, Morningstar Direct data show. The Floating Rate Bond ETF has benefited from investors hoping to position themselves for eventually higher interest rates. The fund added $1.2bn in net inflows year to date through September 30, according to Morningstar’s database.
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