Industry Updates

Goldman Sachs AM takes fee war to China bond ETFs

GSAM now offers cheapest China government bond ETF available in Europe with a TER of 0.24%.

Jamie Gordon

a city skyline at night

Goldman Sachs Asset Management (GSAM) has cut the fee on its China government bond ETF in a move that makes the strategy the cheapest of its kind on the European market.

The Goldman Sachs Access China Government Bond UCITS ETF (CBND) has seen its total expense ratio (TER) cut from 0.35% to 0.24%, a significant cost reduction for investors.

Having launched in October 2019, CBND is physically replicated, traded in US dollars, and has gathered $139m assets under management (AUM).

The fee decrease sees CBND jump from sharing the number three spot for lowest fees in class to having the lowest fee out of the five China bond ETFs on offer.

With a fee of 0.24%, CBND is six basis points (bps) less expensive than its direct rival, the UBS ETF JP Morgan CNY China Government 1-10 Year Bond UCITS ETF (JC11).

It is also cheaper than the iShares China CNY Bond UCITS ETF (CNYB) and the L&G ESG China CNY Bond UCITS ETF (DRGG), which previously boasted the lowest fees of 0.30% apiece.

GSAM said in a statement: “As Chinese government bonds become increasingly mainstream and get added to developed market bond indices, such as the FTSE WGBI, GSAM is proud to offer its clients not only easy but also cost-effective access to this market.”

Next frontier for ETF issuers is China's bond market

The fee reduction comes in as part of an effort to close the gap between CBND and BlackRock’s CNYB. As the second and first-largest ETFs in class respectively, CNYB has a far larger AUM with $6.7bn.

CBND has a 97.2% exposure to Chinese government bonds, with the country’s bond market now the second largest in the world and “significantly under-owned”, according to GSAM.

Featured in this article

Logo for BlackRockLogo for Goldman Sachs Asset ManagementLogo for Legal & General Investment ManagementLogo for UBS Asset Management