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Rating:Is There an ETF Fee War Brewing? Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, July 25, 2012

Is There an ETF Fee War Brewing?

News summary by MFWire's editors

Vanguard's [profile] competitors might feel like they are in the middle of an ETF fee war, as the firm's new Short-Term Inflation-Protected Securities Index Fund will have a lower expense ratio than comparable offerings.

Vanguard filed with the SEC yesterday for the new ETF, as reported yesterday in MFWire's "Stork and Reaper" roundup of daily fund openings, closings, and changes. The fund will have a 0.10 percent expense ratio, tracking the Barclays US Treasury Inflation Protected Securities 0-5 years Index.

Jason Kephart reports for InvestmentNews that BlackRock's [profile] iShares Barclays 0-5 Year TIPS Bond ETF has the same underlying index, but has an expense ratio of 0.20 percent.

Vanguard has been making inroads against BlackRock's iShares for more than two years now, gaining market share and momentum. Vanguard ETFs had inflows of nearly $100 billion while $56.7 billion went to iShares in the past two years.

Laurence Fink, BlackRock's chief executive, said in the firm's second-quarter conference call earlier this month:

"Without going into much detail, we believe we have a plan to address it over the coming months. And it is a big issue, and I have to give a lot of credit to Vanguard, they are a trustworthy brand and they have taken market share from BlackRock in the U.S. core type of equity products." 

Edited by: HFD


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