The price war continues to rage on in Europe with BlackRock this time cutting fees across 12 of its index fund range.
The £9.9bn iShares UK Equity Index fund, the £5.2 billion iShares Corporate Bond Index fund and the £5.1 billion iShares UK Gilts All Stocks Index fund are among the largest to see their ongoing charges figures (OCFs) slashed.
BlackRock said the move had been driven by the investor shift from “traditional security and fund selection to holistic portfolio construction”.
The US giant commented: “We are seeing greater adoption of indexing to improve cost, risk and time efficiency.
“Our role as a product provider and partner to our clients is to equip investors with the best tools for building efficient and cost-effective portfolios.”
BlackRock has made a number of significant cuts in the UK passive funds market this year.
In May, it launched the ‘MyMap’ suite at 0.17%, undercutting Vanguard’s £13.2bn LifeStrategy offering by five basis points.
Meanwhile, the US asset manager reduced fees on two iShares gilt ETFs, the £1.6bn iShares Core UK Gilts UCITS ETF (IGLT) was slashed to 0.07% from 0.20% and the £903m iShares GBP Index-Linked Gilts UCITS ETF (INXG) was cut from 0.25% to 0.10%.
It appears the UK is a key target for BlackRock after it predicted ETFs and index mutual funds in wealth portfolios would increase by 50% over the next two years, earlier this year.
|Fund Name||Old OCF||New OCF|
|iShares US Equity Index Fund (UK)||0.08||0.05|
|iShares Continental European Equity Index Fund (UK)||0.10||0.06|
|iShares UK Equity Index Fund (UK)||0.07||0.05|
|iShares Global Property Securities Equity Index Fund (UK)||0.22||0.18|
|iShares Emerging Markets Equity Index Fund (UK)||0.26||0.16|
|iShares Pacific ex-Japan Equity Index Fund (UK)||0.20||0.13|
|iShares Japan Equity Index Fund (UK)||0.16||0.08|
|iShares Corporate Bond Index Fund (UK)||0.17||0.12|
|iShares Overseas Government Bond Index Fund (UK)||0.16||0.11|
|iShares Overseas Corporate Bond Index Fund (UK)||0.16||0.11|
|iShares Index Linked Gilt Index Fund (UK)||0.16||0.11|
|iShares UK Gilts All Stocks Index Fund (UK)||0.16||0.11|