's [see profile
], ETF pricing cuts gained more coverage, this time in a Bloomberg report
on Vanguard's .
Vanguard’s U.S. ETFs reportedly gained $25.6 billion this year through Sept. 30, 26 percent more than BlackRock
] and State Street
] combined, according to data from Morningstar. Vanguard last month offered 20 new ETFs with funds that track Standard & Poor’s and Russell indexes, including the S&P 500 Index.
By comparison, State Street and BlackRock dropped to a 70 percent combined share from 85 percent in 2005, as investors reportedly wamed to Vanguard's lower-fee funds, as well as those offered by Charles Schwab Corp.
] and Pacific Investment Management Co.
BlackRock's and State Street's fees are on average reportedly double those of Vanguard's and Schwab's. Specifically, the BlackRock iShares ETF that tracks the MSCI Emerging Markets Index reportedly has an expense ratio of 72 basis points while the Vanguard ETF that follows the same benchmark has an expense ratio of 27 bps.
However, both ETF giants are parrying Vanguard's blows with old-school tactics.
iShares managing director Noel Archard
said in an interview that his firm is "absolutely" sticking to its strategy. “Our customers aren’t asking for lower expense ratios. They’re asking for more services.”
, a senior managing director at State Street’s money-management unit, was quoted as saying that his customers see expense ratios as one of several key factors in assessing whether to invest in a particular ETF. According to Rochte, other factors such as liquidity, tracking error and tax-efficiency also come into play for investors.
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