MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Thursday, October 18, 2012 For Fink, Fee Wars Are a "Stupid" Myth When Larry Fink calls to talk about a fee war, the Wall Street Journal, Reuters, and the Financial Times all pick up the phone. During an earnings call, the BlackRock [profile] CEO fired shots at firms for slashing fees in order to gain investor assets, at the expense of profitability. "You can call that fee pressure," Mr. Fink said. He also had another term for it: "stupidity," according to the Wall Street Journal. The Journal reports that although Fink didn't single out any rivals during his diatribe, observers took the comments to be directed at Vanguard[profile]. BlackRock earlier this week launched a suite of new, lower-cost ETFs, and reorganized its retail sales force related to the products. However, during the same earnings call, Fink later pooh poohed market and media buzz about an ETF fee war, acceding to the Financial Times. “There is no price war. We have to move on from this myth about a price war,” Fink is quoted as saying in the FT article. This mythical conflict, nonetheless, appears to be generating a lot of gunfire and carnage. Vanguard dealt a major blow earlier this month by pulling a half trillion in mandates from MSCI and switching to the cheaper FTSE and the University of Chicago's CRSP indices. Charles Schwab entered the fray by dropping fees for seven ETFs in September. BlackRock itself has been no pacifist in this pricing conflagration, earlier this month it created a new suite of lower cost ETFs and reorganized its sales force for the products. In fact, Fink later declared during the call that his firm was actually gaining customer inflows due to Vanguard's benchmark switch decision, according to Reuters. "We are seeing flows into our existing products because of the changes of index providers with our competitor," Reuters reports Fink as saying. Printed from: MFWire.com/story.asp?s=41700 Copyright 2012, InvestmentWires, Inc. All Rights Reserved |