iShares is taking on DB and WisdomTree with its latest offerings.
iShares and WisdomTree today are both launching floating-rate Treasury ETFs as a direct response to investor demand for investment tools with which to mitigate the effects of higher rates ahead. State Street Global Advisors also has plans to offer so-called Treasury floaters.
However, iShares’ Treasury Floating Rate Bond ETF (TFLO) will have a distinct advantage over WisdomTree’s offering, dubbed the WisdomTree Bloomberg Floating Rate Treasury Fund (USFR), because of its zero annual expense ratio.
That’s because TFLO’s investment advisor, BlackRock Fund Advisors, has contractually agreed to waive its advisory fee of 0.15 percent through Feb. 28, 2015, according to a regulatory filing. By comparison, USFR will have an annual expense ratio of 0.15 percent, or $15 for every $10,000 invested.
iShares is also taking on WisdomTree and Deutsche Bank on the international front by launching three MSCI-indexed currency-hedged equity funds targeting Japan, EAFE countries and Germany.
The three planned ETFs, and links to their respective prospectuses, are as follows:
- iShares Currency Hedged MSCI Japan ETF (HEWJ)
- iShares Currency Hedged MSCI Germany ETF (HEWG)
- iShares Currency Hedged MSCI EAFE ETF (HEFA)
iShares’ proposed Japan-focused fund will also bring the San Francisco-based firm into competition with WisdomTree’s blockbuster $12.2 billion WisdomTree Japan Hedged Equity ETF (DXJ | B-48), which gathered $9.74 billion in 2013, according to data compiled by ETF.com.
HEWJ and HEWG will have expense ratios of 0.53 percent, or $53 for every $10,000 invested while HEFA will charge 0.39 percent, or $39 for every $10,000 invested.