(Bloomberg) — BlackRock Inc. has cut costs in a handful of ETFs — including the largest bond fund in the industry — as large issuers intensify the famed fee war in the $7 trillion U.S. marketplace.
In a Securities and Exchange Commission filing Thursday after the market closed, the world’s largest issuer of exchange-traded funds cut the expense ratio on the $85 billion iShares Core US Aggregate Bond ETF (ticker AGG) from 0.04% to 0.03%. Gave.
It also took an ax to spend on two stock ETFs, formerly known as the $1.26 billion iShares MSCI USA Multifactor ETF (LRGF ticker) and the $911 million iShares MSCI International Multifactor ETF (INTF ticker). It reduced the prior fees from 0.2% to 0.08% and for INTFs from 0.3% to 0.15%.
In a separate fund filing, BlackRock said it will change the existing fund name for both and the existing underlying index. The LRGF will be known as the iShares US Equity Factor ETF, and the INTF will be renamed the iShares International Equity Factor ETF. The funds will track indices from STOXX instead of MSCI.
“The fees are coming down,” said Todd Rosenbluth, head of research at ETF Trends. “Advisors and retail investors tend to be fee-conscious when using building block, data-oriented or broad-market products – and products with lower fees attract more attention.”
Following new moves by State Street Corp., BlackRock reduced fees on two of its fixed-income ETFs in January. and Vanguard Group Inc. at the end of last year.
Although BlackRock has enjoyed the largest number of assets under management in the U.S. ETF space for years, Vanguard Group is fast catching up. Investors added more money to the Vanguard ETF than any other US sponsor in the first quarter, with net inflows of $77.4 billion. Investors pulled out $963 million from AGG in 2022, while Vanguard’s $83 billion Total Bond Market ETF (ticker BND) pulled in about $4.4 billion.
“As part of an ongoing review of its product lineup, BlackRock is improving the iShares ETF to better meet the needs of our clients,” said a spokesperson for BlackRock.
BlackRock also cut the expense ratios of several other funds.
- $3.7 billion iShares Core International Aggregate Bond ETF (IAGG ticker) up 0.08% to 0.07%
- $31 billion iShares Core MSCI Total International Stock ETF (ticker IXUS) up 0.09% to 0.07%
- $74 billion iShares Core MSCI Emerging Markets ETF (ticker IEMG) 0.11% to 0.09%
- $7 billion iShares Core MSCI International Developed Markets ETF (IDEV ticker) up 0.05% to 0.04%
—With assistance from Vildana Hajrik.