ETF Watch: iShares Cuts Fees On 9 Funds

December 20, 2016

A recent filing from BlackRock’s iShares arm indicates that nine of the iShares ETFs are seeing their expense ratios cut down. The list includes two core ETFs, six multifactor ETFs and a short-term bond ETF.

The firm previously cut fees on 15 of its “Core” ETFs back in October, and this latest round of reductions seems to be part of an ongoing effort by iShares to remain competitive within the ETF industry.

“We regularly review our lineup of iShares ETFs to ensure we offer quality exposures at competitive prices to meet the needs of our clients,” the issuer said in a statement.

Cuts On Multifactor Products
Most notably, this round of fee cuts includes six of iShares’ multifactor ETFs, which have seen reductions ranging ­­­­­­from 15 to 20 basis points.

The $309 million iShares Edge MSCI Multifactor USA ETF’s (LRGF) expense ratio was trimmed from 0.35% to 0.20%, while the $25 million iShares Edge MSCI Multifactor USA Small-Cap ETF’s (SMLF)  expense ratio fell from 0.50% to 0.30%.

The $184 million iShares Edge MSCI Multifactor Intl ETF (INTF) saw its fee fall from 0.45% to 0.30%, and the fee of the $5 million  iShares Edge MSCI Multifactor Intl Small-Cap ETF (ISCF) was lowered to 0.40% from 0.60%.

The expense ratio for th $29 million iShares Edge MSCI Multifactor Emerging Markets ETF (EMGF) was lowered to 0.45% from 0.65%, while the expense ratio for the $5 million iShares Edge MSCI Multifactor Global ETF (ACWF) fell from 0.50% to 0.35%.

Core And More
iShares also cut fees on three other funds, two of which are part of the firm’s “Core” family of low-priced ETFs.

The expense ratios for the iShares Core Russell U.S. Growth ETF (IUSG) and the iShares Core Russell U.S. Value ETF (IUSV) have been reduced from 0.07% to just 0.05%. It should be noted that the two funds are set to be somewhat transformed as they will cease to track subindexes of the Russell 3000 on Jan. 23, 2017, and adopt subindexes of the S&P 900 ETF as their benchmarks. Essentially, the funds will no longer include small-cap stocks and will instead cover the large- and midcap segments of the U.S. market.

The ETF issuer also cut the fee on the iShares Ultra Short-Term Bond ETF (ICSH) by more than half, from 0.18% to just 0.08%. The fund, which launched in 2013, has just $25 million in assets under management, making it one of the smallest iShares ETFs, which likely explains the dramatic nature of the expense cut.


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