Daily ETF Watch: Guggenheim Cuts Fees

November 22, 2013

The firm behind RSP cuts expense ratios on its equal-weighted sector ETFs.

Guggenheim Investments, the fund sponsor behind the successful equal-weighted S&P 500 ETF, RSP, filed regulatory paperwork detailing 20 percent expense ratio reductions on its entire family of equal-weighted U.S.-focused sector ETFs, effective Dec. 1, 2013.

Each of the nine ETFs—which focus separately on stocks in the following sectors: consumer discretionary, consumer staples, energy, financials, health care, industrials, materials, technology and utilities—will have expense ratios of 40 basis points, or $40 for each $10,000 invested, compared with 50 basis points currently.

The decision was made at a meeting on Nov. 14, and was supported by the funds’ advisor, its investment advisor as well as the board of trustees of the Rydex ETF Trust—the latter group including a majority of independent trustees, according to the regulatory filing.

The company’s decision to cut the expense ratios reflects the overall downward pricing pressure that ETFs have brought to investing. More specifically, the cuts recall the rock-bottom price that Fidelity Investments is charging on its new lineup of cap-weighted sector funds that compete with similar lineups from State Street Global Advisors, Vanguard and, of course, with Guggenheim’s family of equal-weighted U.S. sector ETFs.

Global X Funds Plans Active ETFs

Global X Funds has filed paperwork with regulators seeking exemptive relief for actively managed exchange-traded funds. The firm also laid out groundwork for its first actively managed offering, dubbed the Global X Emerging & Frontier Bond ETF.

The transparent active fund will bet on a diversified portfolio of fixed-income instruments of varying maturities issued by government, corporate and/or other issuers domiciled in emerging and frontier countries. It may invest in a large percentage of its assets in issuers in a single country, a small number of countries or a particular geographic region, according to the filing.

All told, developed and emerging market fixed-income ETFs currently hold $9.14 billion in total assets, according to data compiled by IndexUniverse.



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