BlackRock cuts fees on world's biggest bond ETF and several more

[NEW YORK] BlackRock has just cut costs across a handful of ETFs - including the biggest bond fund in the industry - as big issuers ramp up the famous fee war across the US$7 trillion US marketplace.

In Securities and Exchange Commission filings Thursday (Mar 31) after the market close, the world's largest issuer of exchange-traded funds reduced the expense ratio on the US$85 billion iShares Core US Aggregate Bond ETF to 0.03 per cent from 0.04 per cent.

It also took an ax to expenses on 2 stock ETFs, previously known as the US$1.26 billion iShares MSCI USA Multifactor ETF and the US$911 million iShares MSCI International Multifactor ETF. It cut fees on the former to 0.08 per cent from 0.2 per cent, and to 0.15 per cent for INTF, from 0.3 per cent.

In a separate fund filing, BlackRock said it will be changing the current fund names and the current underlying indexes for both. LRGF will be known as the iShares US Equity Factor ETF, and INTF will be renamed the iShares International Equity Factor ETF. The funds will track indices from Stoxx instead of MSCI.

"Fees continue to move lower," said Todd Rosenbluth, head of research at ETF Trends. "Advisors and retail investors are fee-conscious when using building block, data-oriented or broad-market products - and lower fee products tend to garner more attention."

BlackRock reduced charges on 2 of its fixed-income ETFs in January, following fresh fee-cutting moves from State Street and Vanguard Group late last year.

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"BlackRock makes enhancements to iShares ETFs as part of an ongoing review of its product lineup to both meet and anticipate the needs of our clients," said a spokesperson for BlackRock.

BlackRock also cut expense ratios for several other funds:

• US$3.7 billion iShares Core International Aggregate Bond ETF to 0.07 per cent from 0.08 per cent

• US$31 billion iShares Core MSCI Total International Stock ETF to 0.07 per cent from 0.09 per cent

• US$74 billion iShares Core MSCI Emerging Markets ETF to 0.09 per cent from 0.11 per cent

• US$7 billion iShares Core MSCI International Developed Markets ETF to 0.04 per cent from 0.05 per cent

BLOOMBERG