Van Eck Global, the New York fund provider known for its Market Vectors ETFs, cut the cost of its $530 million Market Vectors Indonesia Index ETF (NYSEArca: IDX)—effective immediately—by 5 percent, making the fund the cheapest in its segment.
IDX, which until April 30 cost 0.60 percent, now has a net expense ratio of 0.57 percent, undercutting its main competitor, the $278 million iShares MSCI Indonesia Investable Market ETF (NYSEArca: EIDO) by 2 basis points.
This is the second time Van Eck has cut IDX’s price. When the fund came to market three years ago, it had an annual net expense ratio of 0.71 percent, but gains in economies of scale as the fund’s assets grow have allowed for increasingly lower costs.
IDX was the first ETF to serve up focused exposure to Indonesia’s equities market when it was launched in 2009. But since then it has since been joined by iShares’ EIDO as well as by the Market Vectors Indonesia Small-Cap ETF (NYSEArca: IDXJ), launched earlier this year with a net expense ratio of 0.61 percent.
Van Eck’s original Indonesia-focused fund, which allocates nearly a third of its portfolio to financials, has delivered strong performance in its three-year history. IDX has had annualized returns in the past three years totaling 54.1 percent, according to data on Van Eck’s website. Year-to-date, IDX is up some 5 percent.
“Indonesia’s growth over the past several years has been impressive, and we believe the outlook remains bright, driven in part by rising domestic consumption and higher levels of disposable income,” Ed Lopez, marketing director at Market Vectors ETFs, said in a press release.
The new expense ratio of 0.57 percent is capped contractually until May 1, 2013, the company said on its website.
WBIG hedges in some areas and bets big in others.
Today the news is full of stories about the collapsing pound. Not so much.
Real-world tracking difference is incredibly important. So why does nobody look at it?
The latest SPIVA scorecard is pretty depressing news for active managers.