iShares Doubles 'Core' Lineup To 20 ETFs

June 10, 2014

The world’s biggest ETF company doubles the number of ultra-cheap ‘Core’ ETFs it’s offering.

About 20 months after the launch of its 10-fund “Core” lineup of ultra-cheap ETFs, BlackRock’s ETF unit iShares plans on Thursday to add another 10 funds to the group, a reflection of how investors are increasingly using ETFs as long-term core holdings.

The additions to the “Core” lineup will focus on U.S. growth, value and dividend equities, as well as European and Pacific equities. The new Core rollout will also focus on U.S. bond sectors, and a more diversified bond market exposure, the company said in a press release. The original Core funds cover broad swaths of the investment universe including the S&P 500, emerging markets, developed markets and big parts of the bond markets.

“Clients are using ETFs more and more at the core of their portfolios, whether they are personal investors or advisors or institutions,” Patrick Dunne, head of Global Markets & Investments for iShares, said in an interview with ETF.com. “So this launch is a natural extension for us to provide more tools and offer more choices to build that core.”

The focus on low fees is also sure to breathe new life into an ongoing fee war in the fast-expanding world of exchange-traded funds. Indeed, the rollout in October 2012 of iShares’ 10 original  “Core” funds was widely seen as a riposte to the withering effect that low-cost ETFs sponsored by Vanguard and even Charles Schwab were having on iShares’ asset gathering.

Thursday’s launch, which also follows separate rollouts of “Core”-type ETF lineups in European and Canadian markets, will involve the repurposing of six existing funds and the launching of four brand new funds. The existing funds will mostly have lower expense ratios than previously, and together those six existing ETFs have about $5.6 billion in assets.

The 10 new Core funds—and, where applicable, their new tickers, new expense ratios and names (amended with the word “Core”)—are as follows:

 

U.S. Equities

  • iShares Core U.S. Growth ETF (IWZ | A-90), an existing fund that will assume the new trading symbol “IUSG” on Thursday, June 12. Its expense ratio will drop at that time from 25 basis points a year currently to 9 basis points, or $9 for each $10,000 invested
  • iShares Core U.S. Value ETF (IWW | A-91), an existing fund that will assume the new trading symbol “IUSV” on Thursday, June 12. Its expense ratio will drop at that time from 26 basis points a year currently to 9 basis points
  • iShares Core Dividend Growth ETF, a new fund that will begin trading on Thursday, June 12 under the symbol “DGRO” with an annual expense ratio of 12 basis points
  • iShares Core High Dividend ETF (HDV | A-67), an existing fund that will continue to trade with the symbol “HDV,” but with a lower annual expense ratio of 12 basis points from 40 basis points currently
  • iShares Core MSCI Europe ETF, a new fund that will begin trading on Thursday, June 12 under the symbol “IEUR” with an annual expense ratio of 14 basis points
  • iShares Core MSCI Pacific ETF, a new fund that will begin trading on Thursday, June 12 under the symbol “IPAC” with an annual expense ratio of 14 basis points

U.S. Fixed Income

  • Shares Core Total USD Bond Market ETF, a new fund that will begin trading on Thursday, June 12 under the symbol “IUSB” and with an annual expense ratio of 15 basis points
  • iShares Core U.S. Credit Bond ETF (CFT | B-89), an existing fund that will assume the new trading symbol “CRED” on Thursday, June 12. Its expense ratio will drop at that time from 20 basis points a year currently to 15 basis points
  • iShares Core U.S. Treasury Bond ETF (GOVT | A-97), an existing fund that will continue to trade with the symbol “GOVT,” but with the same annual expense ratio of 15 basis points.
  • iShares Core GNMA Bond ETF (GNMA | C-84), an existing fund that will continue to trade with the symbol “GNMA,” but with a lower annual expense ratio of 15 basis points from 25 basis points previously

The original 10 ETFs that became the backbone of the then-new iShares Core brand in October 2012 now command a total of $117 billion in assets under management. That’s $26 billion more than the $69 billion in assets when the lineup was launched.

While that increase reflects market movements, there’s no doubt the cheap lineup has attracted investor attention.

 

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