BlackRock Strikes Back with New Funds and Fee Cuts
October 16, 2012
The battle for ETF investors continues, this time with BlackRock (NYSE: BLK) introducing a revamped ETF lineup and fee reductions.
The investment firm created the iShares Core Series, a suite of 10 U.S. ETFs designed for the needs of long-term, buy-and-hold investors.
"As we look to build on our market-leading position in the ETF industry, we are taking a number of steps to further bolster our value proposition for investors, with an initial focus on the United States, said Mark Wiedman, Managing Director and Global Head of iShares. The combination of our iShares Core Series targeting buy-and-hold investors and a campaign to refresh the powerful iShares brand supported by what will now be the industry's largest U.S. retail sales force are key components of our broader plan to drive even stronger growth in the U.S. and globally."
Widely held ETFs like the iShares Core S&P 500 ETF (NYSEARCA:IVV) and the iShares Core Total US Bond Market ETF (NYSEARCA:AGG) will see their annual expense ratios drop to 0.07% and 0.08% respectively on October 17.
The iShares Core Series is composed of four new and six existing funds, designed specifically with long-term buy-and-hold investors in mind. The iShares Core Series consists of the following funds:
iShares Core S&P Total U.S. Stock Market ETF (ITOT) (previously ISI)
iShares Core S&P 500 ETF (IVV)
iShares Core S&P Mid-Cap ETF (IJH)
iShares Core S&P Small-Cap ETF (IJR)
iShares Core MSCI Total International Stock ETF** (IXUS)
iShares Core MSCI Emerging Markets ETF** (IEMG)
iShares Core MSCI EAFE ETF** (IEFA)
U.S. Fixed Income
iShares Core Total U.S. Bond Market ETF (AGG)
iShares Core Long-Term U.S. Bond ETF (ILTB)* (previously GLJ)
iShares Core Short-Term U.S. Bond ETF** (ISTB)
*Beginning on or around Tuesday, October 23, 2012, (ILTB) will track a new underlying index, the Barclays US Long Government/Credit Bond Index and will cease to track the B of A Merrill Lynch 10+ Year US Corporate & Government Index.
**These Funds are expected to begin trading on or about October 22, 2012
Thus far this year, asset flows away from stock mutual funds hasnt stalled ETF flows. The iShares ETFs have attracted $50 billion in net new assets year to date, as of Sept. 30, more than any other provider. Also, BlackRock projects the US fixed income ETF category will likely grow to $1.4 trillion in assets over the next decade, compared with $222 billion today.
Last month, the company launched the iShares MSCI Frontier 100 Index Fund (NYSEArca:FM), which tracks stocks from micro-emerging market countries like Argentina, Bangladesh, Croatia, Estonia, Jordan, Kazakhstan, Kenya, Kuwait, Lebanon, Mauritius, Nigeria, Oman, Pakistan, Qatar, Romania, Serbia, Sri Lanka, Ukraine, the United Arab Emirates, and Vietnam.
FM charges 0.79% in annual expenses.
The company also integrated its iShares and BlackRock U.S. retail sales teams, creating the largest retail field force in the U.S. asset management industry, to offer financial advisors and distribution partners a fully integrated combination of index and active products and solutions for today's investors.
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