Industry Updates

Invesco cuts fees on four equity and bond ETFs

The group now houses the lowest fee Russell 2000 ETF

Lauren Gibbons

 A stack of coins and ETF blocks

Invesco has slashed the fees of four equity and bond ETFs including its $65m Russell 2000 ETF as it looks to boost demand.

The US giant reduced the fees on the Invesco Russell 2000 UCITS ETF (RTYS) from 0.45% to 0.25%, making it Europe’s lowest cost ETF to track the US small-cap index, undercutting rivals State Street Global Advisors (SSGA), DWS and Amundi.

SSGA and DWS’s ETFs have total expense ratios (TERs) of 0.30%, and house $2.8bn and $1.1bn, respectively.

Meanwhile, the $377m Amundi Russell 2000 UCITS ETF (RS2U) is priced at 0.35%.

The firm also cut the fees on the Invesco MSCI Japan UCITS ETF (MXJP) from 0.19% to 0.12%, now mirroring Blackrock, SSGA, DWS and UBS Asset Management, the latter of which reduced fees for its Japan ETF in January.

Elsewhere, the group cut fees on its Invesco Euro Cash 3 Months UCITS ETF (PEU) by six basis points (bps) to 0.09% while the Invesco Euro Government Bond UCITS ETF (EIBB) was cut from 0.10% to 0.07%.

In a shareholder notice, Invesco said: “As part of our regular product line review, we identified four funds where we determined it was appropriate to reduce the management fee.”

The fee cuts become the latest addition to the continent’s price war, with UBS AM slashing the fees of over 200 ETFs, including its MSCI world, S&P 500 and emerging markets products.

DWS also slashed the fees across 31 ETFs last December – including its £2.5bn Xtrackers Eurozone Government Bond UCITS ETF (XGLE) – with the ETFs housing a total of $11bn.

Invesco also chopped the fee of its physically-backed bitcoin exchange-traded product (ETP), the Invesco Physical Bitcoin ETP (BTIC) from 0.99% to 0.39% in January following the simultaneous launch of 11 spot bitcoin ETFs in the US.

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