The pressure on asset managers to lower fees once again came to the fore this week as ETF issuers look to gain market share over their rivals.
BlackRock initiated the price war after it launched the iShares Copper Miners UCITS ETF (COPM), 10 basis points (bps) lower than the only other copper miners ETF on the market, the $58m Global X Copper Miners UCITS ETF (COPX).
Global X promptly responded by cutting the total expense ratio (TER) of its ETF to match that of BlackRock’s in a move it hopes will deter investors from defecting to the rival product.
The thematic play has become essential for those who believe the energy transition is all about the metals, with copper playing a huge role in the electronification across renewable energy, electric vehicles and broader infrastructure.
The fact the price war has reached the thematic space highlights the pressure to attract a broader range of investors amid a struggle to raise assets in the current market environment.
Earlier in the month, HANetf also cut the TER on the HANetf S&P Global Clean Energy Select HANzero UCITS ETF (ZERO) from 0.55% to 0.39%.
Elsewhere, Invesco came to market with Europe’s cheapest ETF offering exposure to developed and emerging markets, undercutting its rivals State Street Global Advisors (SSGA) by 2bps.
The Invesco FTSE All-World UCITS ETF (FWRA) has a TER of 0.15% and can keep its fees low using a sampling strategy, which incorporates quantitative analysis to select securities using factors such as country weights, industry sector weights and liquidity.
It comes after SSGA slashed its fees on the SPDR MSCI ACWI IMI UCITS ETF (SPYI) in March from 0.40% to 0.17%, undercutting BlackRock’s $6.4bn iShares MSCI ACWI UCITS ETF (SSAC), priced at 0.20%.
ETF launches galore
Having touched on the launches of BlackRock and Invesco already, other issuers also hit the market with new ETFs this week, in what could be early signs the market may spark back into life.
HANetf unveiled the Future of Defence UCITS ETF (NATO) on the London Stock Exchange with a TER of 0.49%.
The ETF, which tracks the EQM Future of Defence index, aims to offer exposure to global companies generating revenues from NATO and NATO-allies (NATO+) defence and cyber defence spending.
Elsewhere, BNP Paribas Asset Management launched its first ETF on its Irish platform, a long-awaited launch as the asset manager looking to take advantage of the beneficial tax treaty for US equities ETF housed on the Emerald Isle.
Meanwhile, the BNP Paribas Easy S&P 500 ESG UCITS ETF (SPEEU) listed on Euronext Paris with a TER of 0.12%.
Last but certainly not least, Tabula Investment Management expanded its fixed income range with the Tabula Global High Yield Fallen Angels Paris-aligned Climate UCITS ETF (THFA).
The sharply-named ETF launched with $50m seed from an unnamed “large Nordic institution” and will look to provide exposure to companies downgraded from investment grade while aligning with Paris-Aligned Benchmark (PAB) objectives.
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