BlackRock Inc., the world’s biggest money manager, cut fees on certain share classes of three fixed-income funds as the departure of Bill Gross from Pacific Investment Management Co. is sending billions of dollars to competing firms.
BlackRock instituted or lowered voluntary caps on share classes of its Low Duration, Core Bond and Total Return funds, the New York-based firm said Monday in filings with the U.S. Securities and Exchange Commission. Among the biggest changes, the expense ratio for institutional shares of the $3 billion Core Bond fund fell 20% to 45 basis points, and fees for the same share class of the $4 billion Total Return fund dropped 13%, also to 45 basis points, according to filings from earlier this year.
Money managers are positioning to attract clients after the Sept. 26 exit of Pimco co-founder Gross has prompted investors to seek alternatives. Investors rattled by the change took a record $23.5 billion in September from Pimco’s $202 billion Total Return Fund, and are moving money to competing funds or parking it in money-market funds and exchange-traded funds while they reevaluate.
“By implementing the new voluntary expense caps, BlackRock believes that the portfolios’ expenses will be even more attractive,” Katherine Ewert, a spokeswoman for BlackRock, said in an e-mailed statement.
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