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September 14, 2012 at 10:54 AM
New products introduced over the last week include a series of geographic exposure indexes from Russell, a strategic dividend income fund from Advantus and an ETF from AdvisorShares.
In addition, BlackRock announced that it would cut fees on some of its large, liquid ETFs, and Market Vectors lowered the expense cap on one of its ETFs.
Here are the latest developments of interest to advisors:
1) BlackRock to Cut ETF Fees
After a research note issued Sept. 5 by Sanford Bernstein & Co. that said BlackRock would need to cut fees on some of its products, Bloomberg reported that the firm is doing just that, dropping fees on large ETFs after Vanguard Group outpaced BlackRock in market share.
While State Street Global Advisors said in a report that BlackRock still leads with 41% of the U.S. ETF business, that’s down 1.6% so far this year through July, while Vanguard gained 1.8% to reach 18% market share. BlackRock’s fees on some of its large and liquid iShares products are double, or even more than double, Vanguard’s fees on corresponding products, and it’s showing in the marketplace. Fee cuts are BlackRock’s response. Smaller, less liquid funds are under less pressure to drop fees.
2) Market Vectors Cuts Expense Cap for Emerging Markets Local Currency ETF
Van Eck Associates Corp. lowered the expense cap for its Market Vectors Emerging Markets Local Currency ETF (EMLC) from 49 basis points (bps) to 47 bps, effective Sept. 1. The expense cap is effective through September 1, 2013 and excludes certain expenses, such as interest.
EMLC seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the J.P. Morgan GBI-EMG Core Index (GBIEMCOR), a rules-based, market capitalization-weighted index that is designed to be investible and includes only those countries that are accessible by most of the international investor base.
3) Russell Introduces Geographic Exposure Indexes
