Race To The Bottom
“There’s not many companies that have put themselves in this kind of playing shape for the ‘Vanguardian future,’” Balchunas said of Guggenheim, noting that after a market downturn, a company like Guggenheim could be more valuable than firms that are currently bigger and more established.
Balchunas speaks of the “Vanguard effect.” The firm came into the ETF space and rapidly gathered assets through its established audience and its low fees. Goldman has mimicked that strategy successfully with the launch of GSLC, which is already a $2.3 billion fund.
“This is all just a huge race to the bottom,” he added.
WisdomTree’s EM Funds
Although not approaching the dramatic nature of Guggenheim’s fee cut, WisdomTree was itself very aggressive in trimming fees on four of its funds.
The cuts are as follows:
- WisdomTree Emerging Markets Consumer Growth Fund (EMCG), cut from 0.63% to 0.32%
- WisdomTree Emerging Markets Quality Dividend Growth Fund (DGRE), cut from 0.63% to 0.32%
- WisdomTree China ex-State-Owned Enterprises Fund (CXSE), cut from 0.53% to 0.32%
- WisdomTree Emerging Markets ex-State-Owned Enterprises Fund (XSOE), cut from 0.58% to 0.32%
However, these funds are tiny compared to RSP; DGRE is the largest, at $55 million. The move was likely made with the hope of driving additional assets to the funds at a time when emerging markets—especially China—are getting more attention.