First Zero Fee ETNs Launching
Barclays first to introduce an exchange-traded note with no expense ratio.
Charles Schwab and Barclays' iPath unit are the latest product issuers to fire shots in the ongoing ETF fee war. On Thursday, Schwab is launching three bond ETFs that cost just 0.06% each, while on Tuesday, iPath is rolling out the first no-fee ETNs to grace the market.
The iPath products will include the iPath Gold ETN (GBUG) and the iPath Silver ETN (SBUG). The former tracks the Barclays Gold 3 Month Index Total Return, while the latter tracks the Barclays Silver 3 Month Index Total Return.
The cheapest ETN currently on the market is the ETRACS UBS Bloomberg CMCI Gold Total Return ETN (UBG), which only charges 0.30%. Barclays’ iPath unit offers a family of 45 existing ETNs. It made headlines in the exchange-traded product space last year when it shut down 50 ETNs in April, only to roll out a range of replacement products in the aftermath.
Both new ETNs list on the NYSE Arca.
Schwab Expands Bond ETF Offering
Schwab’s three ETFs launching on Thursday bring its fixed income offering to a total of seven funds, and the number of funds in its entire ETF family to 25. All three fill holes in the firm’s lineup of corporate and Treasury offerings.
The funds all list on the NYSE Arca, with expense ratios of 0.06%. They and their tickers are as follows:
- Schwab 1-5 Year Corporate Bond ETF (SCHJ)
- Schwab 5-10 Year Corporate Bond ETF (SCHI)
- Schwab US Long-Term U.S. Treasury ETF (SCHQ)
“The Schwab ETFs are designed to serve investors' biggest needs, and do so at a great value. We constantly seek client feedback, and use that input as a major factor in deciding how we expand our product lineup. These three new ETFs are designed to address the needs that our clients tell us are most important to them,” said Jonathan de St. Paer, president of Charles Schwab Investment Management.
The prices of the new funds match the fees of their top competitors. The $13 billion iShares Short-Term Corporate Bond ETF (IGSB) also charges 0.06%, as do the $8.5 billlion iShares Intermediate-Term Corporate Bond ETF (IGIB) and the $2 billion SPDR Portfolio Long Term Treasury ETF (SPTL).
Contact Heather Bell at [email protected]
