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Portfolio > Asset Managers

9 BlackRock iShares ETFs Slash Fees, Switch Indexes

By Bernice Napach

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What You Need to Know

  • The changes reflect Morningstar's new Broad Style Indexes.
  • The nine ETFs, totaling $7.5 billion in assets all have new tickers and expense ratios that are a fraction of previous fees.
  • The fee cut is intended to match or underprice similar Vanguard ETFs.

As expected, nine of BlackRock’s iShares equity ETFs have switched to Morningstar’s new broad style equity indexes and, with that conversion, have not only changed their underlying indexes and ticker symbols but slashed their fees as well, to match or underprice similar Vanguard ETFs. Three of the iShares ETFs have also changed their names.

In addition, all nine ETFs, which represent a total $7.5 billion in assets, will undergo share splits effective at the close of business on April 16 for shareholders of record as of April 14, making their shares cheaper and even more accessible to investors.

The new Morningstar Broad Style indexes that the iShares ETFs track are more refined than Morningstar’s previous indexes. For example, cap-weighted indexes are now also assigned growth or value designations, and Morningstar’s U.S. Large Value, Large Core and Large Growth Indexes now also include mid-cap stocks.

“We are excited to make enhancements to this robust product suite,” said Chad Slawner, head of iShares U.S. Product at BlackRock. “Through benchmark changes, share splits and fee reductions we can help lower the hurdles to investing, increase portfolio flexibility and broaden market coverage so that clients have access to, with as few as two ETFs, 99.5% of the U.S. stock market.”

Three of the iShares Morningstar-linked large-cap equity ETFs now include mid-caps and have changed their names as well as their expense ratios. They are:

  • The iShares Morningstar Large-Cap Value ETF (JKF) is now the iShares Morningstar Value ETF (ILCV), with an expense ratio of 0.04% versus 0.25% previously. Its shares will be split 2:1, cutting its price, now near $122, in half.
  • The iShares Morningstar Large-Cap ETF (JKD), now the iShares Morningstar U.S. Equity ETF (ILCB), has an expense ratio of 0.03% versus 0.20% previously. Its shares will be split 4:1.
  • The iShares Morningstar Large-Cap Growth ETF (JKE) is now the iShares Morningstar Growth ETF (ILCG), with an expense ratio of 0.04% versus 0.25%. Its shares will split 5:1.

Six iShares Morningstar-linked mid-cap and small-cap ETFs have kept their names and maintained their original investment objectives, but they follow the new broader Morningstar indexes, have new tickers and lower fees and they will split their shares next month. They are:

  • iShares Morningstar Mid-Cap Value ETF (JKI). New ticker: IMCV. New Morningstar index: U.S. Mid Cap Broad Value Index. New expense ratio: 0.06% versus 0.30% previously. Its shares will split 3:1.
  • iShares Morningstar Mid-Cap ETF (JKG). New ticker: IMCB. New Morningstar index: U.S. Mid Cap Index. New expense ratio: 0.04% instead of 0.25%. Its shares will split 4:1.
  • iShares Morningstar Mid-Cap Growth ETF (JKH). New ticker: IMCG. New Morningstar Index: U.S. Mid Cap Broad Growth Index. New expense ratio: 0.06%, down from 0.30%. Its shares will split 6:1.
  • iShares Morningstar Small-Cap Value ETF (JKL). New ticker: ISCV. New Morningstar index: U.S. Small Cap Broad Value Extended Index. New expense ratio: 0.06%, down from 0.03%. Its shares will split 3:1.
  • iShares Morningstar Small-Cap ETF (JKJ). New ticker: ISCB. New Morningstar index: U.S. Small Cap Extended Index. New expense ratio: 0.04%, down from 0.25%. Its shares will split 4:1.
  • iShares Morningstar Small-Cap Growth ETF (JKK). New ticker: ISCG. New Morningstar index: U.S. Small Cap Broad Growth Extended Index. New expense ratio: 0.06%, down from 0.03%. Its shares will split 6:1.

Bernice Napach

@Think_Napach

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