BNY Mellon Debuts Zero-Fee ETFs

After years of being best-known as a behind-the-scenes player in the ETF industry, providing everything from indexes to custody services, BNY Mellon has issued its own ETFs, staking out low-cost territory with three new funds. The new products and their expense ratios are as follows:

• BNY Mellon US Large Cap Core Equity ETF (BKLC), 0.00%
• BNY Mellon US Mid Cap Core Equity ETF (BKMC), 0.04%
• BNY Mellon US Small Cap Core Equity ETF (BKSE), 0.04%

All three funds list on the NYSE Arca. Interestingly, although SoFi launched two ETFs with expense ratios of zero, those fees includes a waiver that reduces the cost and has to be renewed. BKLC’s expense ratio is quite simply zero.

The Funds

The small cap BKSE’s expense ratio matches that of the Schwab U.S. Small-Cap ETF (SCHA), while BKMC’s expense ratio matches that of the Schwab U.S. Mid-Cap ETF (SCHM) and the Vanguard Mid-Cap ETF (VO).

The funds that launched today are all plain-vanilla, cap-weighted ETFs that track Morningstar indexes.

BNY Mellon is making a bold move, similar to J.P. Morgan launching its low-cost BetaBuilders ETFs. However, like J.P. Morgan, it has the brand name and depth of experience in the ETF space to make a successful go of it.

The issuer has five more ETFs set to launch in the coming weeks, including an aggregate U.S. bond ETF that, like BKLC, will have an expense ratio of 0.00%. The fixed income funds will track Bloomberg Barclays indexes. The remaining unlaunched ETFs and their expense ratios include the following:

• BNY Mellon International Equity ETF (BKIE), 0.04%
• BNY Mellon Emerging Markets Equity ETF (BKEM), 0.11%
• BNY Mellon Core Bond ETF (BKAG), 0.00%
• BNY Mellon Short Duration Corporate Bond ETF (BKSB), 0.06%
• BNY Mellon High Yield Beta ETF (BKHY), 0.22%

Contact Heather Bell at [email protected]