BlackRock Cuts Expenses On 34 ETFs

January 18, 2011

iShares cuts fees on 34 foreign funds, including EEM.

BlackRock, parent of the world’s biggest exchange-traded fund firm, iShares, cut expense ratios on 34 ETFs, all of them foreign equity funds, including the huge iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM). The changes reflect growing assets in the funds and increased investor interest in international funds.

The funds’ prospectuses stipulate that expense ratios on the funds should decrease as assets under management grow. All the reductions were effective on Jan. 1. The company cut EEM’s expense ratio to 0.69 percent from 0.72 percent previously. Some of the changes are also related to changes in foreign taxes, the company said.

“The changes are a reflection of breakpoints being triggered,” Christine Hudacko, a spokeswoman at San Francisco-based iShares, said in a telephone interview.

The fact that so many of the affected funds are foreign—many of them country-specific in the emerging markets—reflects how much U.S. investors are getting over their home-country bias and scouring the planet for returns. EEM, for example, had net inflows of $2.28 billion in 2010 and ended the year with $47.46 billion in assets, making it the single-biggest broad-based emerging markets fund.

Among the more well-known single-country funds, prices of which iShares happened to cut to 0.61 percent from 0.65 percent, are:

  • iShares MSCI Chile Investable Market Index Fund (NYSEArca: ECH), which almost doubled in size in 2010 and ended the year with about $1 billion in assets;
  • iShares MSCI South Korea Index Fund (NYSEArca: EWY), which ended the year with $4.17 billion in assets after gathering $333.3 million in new investment last year;
  • iShares MSCI Brazil Index Fund (NYSEArca: EWZ), which added net assets of $530 million and ended the year with more than $11 billion in assets; and
  • iShares MSCI Turkey Investable Market Index Fund (NYSEArca: TUR), which added $308 million to end the year at $787 million.

All the changes are in the table below:

Fund Name Previous Expense Ratio New Expense Ratio Difference Reason for Difference/General Notes
iShares, Inc.
iShares MSCI Australia Index Fund (NYSEArca: EWA) 0.55% 0.53% 0.02%
iShares MSCI Austria Investable Market Index Fund (NYSEArca: EWO) 0.55% 0.54% 0.01%
iShares MSCI Belgium Investable Market Index Fund (NYSEArca: EWK) 0.56% 0.54% 0.02%
iShares MSCI Brazil Index Fund (NYSEArca: EWZ) 0.65% 0.61% 0.04%
iShares MSCI BRIC Index Fund NYSEArca: BKF) 0.72% 0.69% 0.03%
iShares MSCI Canada Index Fund (NYSEArca: EWC) 0.55% 0.53% 0.02%
iShares MSCI Chile Investable Market Index Fund (NYSEArca: ECH) 0.65% 0.61% 0.04%
iShares MSCI Emerging Markets Eastern Europe Index Fund (NYSEArca: ESR) 0.72% 0.69% 0.03%
iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM) 0.72% 0.69% 0.03% 0.01% in foreign taxes
iShares MSCI EMU Index Fund NYSEArca: EZU) 0.56% 0.54% 0.02%
iShares MSCI France Index Fund (NYSEArca: EWQ) 0.55% 0.54% 0.01% 0.01% in foreign taxes
iShares MSCI Germany Index Fund (NYSEArca: EWG) 0.55% 0.53% 0.02%
iShares MSCI Hong Kong Index Fund (NYSEArca: EWH) 0.55% 0.53% 0.02%
iShares MSCI Israel Capped Investable Market Index Fund (NYSEArca: EIS) 0.66% 0.61% 0.05%
iShares MSCI Italy Index Fund (NYSEArca: EWI) 0.59% 0.54% 0.05% change in foreign taxes from 0.04% to 0.00%
iShares MSCI Japan Index Fund (NYSEArca: EWJ) 0.56% 0.54% 0.02%
iShares MSCI Japan Small Cap Index Fund (NYSEArca: SCJ) 0.56% 0.53% 0.03%
iShares MSCI Malaysia Index Fund (NYSEArca: EWM) 0.56% 0.53% 0.03%
iShares MSCI Mexico Investable Market Index Fund (NYSEArca: EWW 0.55% 0.53% 0.02%
iShares MSCI Netherlands Investable Market Index Fund (NYSEArca: WN) 0.55% 0.53% 0.02%
iShares MSCI Singapore Index Fund (NYSEArca: EWS) 0.55% 0.53% 0.02%
iShares MSCI South Africa Index Fund (NYSEArca: EZA) 0.66% 0.61% 0.05%
iShares MSCI South Korea Index Fund (NYSEArca: EWY) 0.65% 0.61% 0.04%
iShares MSCI Spain Index Fund (NYSEArca: EWP) 0.56% 0.54% 0.02%
iShares MSCI Sweden Index Fund (NYSEArca: EWD) 0.55% 0.53% 0.02%
iShares MSCI Switzerland Index Fund (NYSEArca: EWL) 0.56% 0.53% 0.03%
iShares MSCI Taiwan Index Fund (NYSEArca: EWT) 0.82% 0.71% 0.11% change in foreign taxes from 0.17% to 0.10%
iShares MSCI Thailand Investable Market Index Fund (NYSEArca: THD) 0.65% 0.62% 0.03% 0.01% in foreign taxes
iShares MSCI Turkey Investable Market Index Fund (NYSEArca: TUR) 0.65% 0.61% 0.04%
iShares MSCI United Kingdom Index Fund (NYSEArca: EWU) 0.55% 0.53% 0.02%
iShares Trust
iShares MSCI All Peru Capped Index Fund (NYSEArca: EPU) 0.63% 0.62% 0.01% 0.01% foreign taxes
iShares MSCI Indonesia Investable Market Index Fund (NYSEArca: EIDO) 0.65% 0.61% 0.04%
iShares MSCI Ireland Capped Investable Market Index Fund (NYSEArca: EIRL) 0.55% 0.53% 0.02%
iShares MSCI Poland Investable Market Index Fund (NYSEArca: EPOL) 0.65% 0.61% 0.04%

Information provided by iShares

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