Industry Updates

ETF Wrap: UBS AM enters fee wars

A raft of fee cuts, investors pouring into inflation-protection ETFs and a flurry of new launches made headlines this week

Jamie Gordon

This week saw UBS Asset Management throw down the gauntlet with fee cuts across more than 200 ETF share classes. 

One of the changes means the firm now offers Europe’s cheapest MSCI World ETF, after slashing the total expense ratio (TER) on the UBS ETF MSCI World UCITS ETF (UC55) from 0.30% to 0.10%. 

Elsewhere, the firm halved the fee on the UBS ETF MSCI Europe UCITS ETF (UB12) to 0.10% and trimmed charges on the UBS ETF Bloomberg US Treasury 7-10 UCITS ETF (UB82) from 0.12% to 0.07%. 

The sweeping fee cuts come after UBS booked $715m of outflows last year, the largest exodus across Europe’s top eight issuers. 

Its offensive comes after State Street and DWS, cut fees on ETFs housing $21bn at the end of last year. 

Inflation battle not won 

Next, December inflation numbers surprising to the upside prompted investors to duck and cover in inflation-protected ETFs. 

During the first three weeks of the year, investors poured $440m into BlackRock’s Treasury inflation-protection ETF. 

This came after a US CPI print of 3.6%, ahead of the 3.4% forecast for December. 

There were also other signs an economic soft landing could be on the cards, with US new jobs coming in 46,000 above forecast, while retail sales were 20 basis points above expectations. 

A flurry of launches 

Finally, the week saw several issuers fill out gaps in more esoteric corners of the market. 

First Trust built out its thematic commodity range, with the First Trust Indxx Future Economy Metals UCITS ETF (METL) and First Trust Bloomberg Scarce Resources UCITS ETF (SCAR).

Next, ETF Stream revealed AXA Investment Managers had expanded its Paris-Aligned offering with the AXA IM MSCI Europe Equity PAB UCITS ETF (AIME).

Elsewhere, BlackRock became the latest to launch a Shariah-compliant sukuk ETF, with the iShares $ Sukuk UCITS ETF (SKUK), after HSBC AM broke ground on the space last year. 

And finally, JP Morgan Asset Management expanded its active US equity range, with the JPM Active US Equity UCITS ETF (JUSE), JPM Active US Value UCITS ETF (JAVA) and JPM Active US Growth UCITS ETF (JGRO).

ETF Wrap is a weekly digest of the top stories on ETF Stream

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