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Blackrock Cuts Fee and Revamps Nine Style Investing ETFs
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Amid cutthroat competition in the quickly growing $6 trillion ETF industry for rock-bottom fees, BlackRock has once again jumped on the bandwagon to cut annual fees for the $7.6 billion lineup of style ETFs.
The world’s biggest exchange-traded fund issuer has cut expense ratios on nine iShares Morningstar U.S. Equity Style Box ETFs to a range of 0.03% to 0.06% from 0.25% to 0.30%. The move reflects BlackRock’s commitment to being the leading ETF provider in all the segments of the industry, including the burgeoning thematic arena, according to the head of iShares Americas Armando Senra.
The fee reduction will boost Blackrock’s competitive edge, positioning the suite as the lowest cost style box ETF family in the industry. This is especially true, as Blackrock has been facing stiff competition, mainly from Vanguard Group, for asset flows and the latter’s products topped the fund flow list last year for the first time since 2013. The style box investing market has grown to over $1.7 trillion of assets under management and has already gathered over $24 billion in flows this year, representing 56% of 2020 total flows (read: 5 ETFs Most Loved by Investors Last Week).
Investors should note that Blackrock has lowered fees for the second time in a year. Last year in June, the issuer cut the expense ratio of its largest fund — iShares Core S&P 500 ETF (IVV - Free Report) — to 0.03% in order to match a rival product from Vanguard.
These suite of products focus on specific approaches such as company size, growth or value investing. Along with lower pricing, the suite has been given a new look, featuring a combination of new indices from Morningstar, new tickers, new fund names and share splits. These funds will now track the Morningstar Broad Style Indexes that were launched in January.
The revamped nine ETFs with the new features have been discussed below. Most of these products now have expense ratio in line with that of Vanguard’s:
iShares Morningstar Value ETF (ILCV - Free Report) : This ETF, previously named as iShares Morningstar Large-Cap Value ETF (JKF), now tracks the Morningstar US LargeMid Cap Broad Value Index instead of Morningstar US Large Value Index. With the change in index, the fund now has a broader approach to the value investing in both the large and mid-cap securities. Expense ratio has been lowered from 0.25% to 0.04% (read: 3 ETFs to Invest in Cheapest Value Stocks).
iShares Morningstar U.S. Equity ETF (ILCB - Free Report) : This fund, previously named iShares Morningstar Large-Cap ETF (JKD), with expense ratio of 0.20%, will now charge just 3 bps in annual fees. It now offers exposure to both large and mid-cap securities rather than only large caps.
iShares Morningstar Growth ETF (ILCG - Free Report) : This fund targets the growth segment of the large and mid-cap space and charges 4 bps in annual fees. Previously, it was trading in the name of iShares Morningstar Large-Cap Growth ETF (JKE) with an expense ratio of 0.25%.
iShares Morningstar Mid-Cap Value ETF (IMCV - Free Report) : This fund, previously trading under the ticker JKI, offers exposure to the value corner of the mid-cap segment and tracks the Morningstar US Mid Cap Broad Value Index. Its expense ratio has been lowered to 0.06% from 0.30%.
iShares Morningstar Mid-Cap ETF (IMCB - Free Report) : This fund, previously trading under the ticker JKG, now tracks the Morningstar US Mid Cap Index rather than Morningstar US Mid Core Index. It will charge 4 bps in annual fees, down from the previous 25 bps annual fees.
iShares Morningstar Mid-Cap Growth ETF (IMCG - Free Report) : This ETF provides exposure to the growth corner of the mid-cap segment with an expense ratio of 0.06%. Previously, it traded under the ticker name JKH with an expense ratio of 0.30%.
iShares Morningstar SmallCap Value ETF (ISCV - Free Report) : This ETF’s investment objective also remained targeting the small-cap value space but it now tracks the Morningstar US Small Cap Broad Value Extended Index rather than Morningstar US Small Value Index. Expense ratio has been reduced to 0.06% from 0.30%. Previously, it traded under the ticker name JKL (read: A Guide to Small-Cap Value ETF Investing).
iShares Morningstar SmallCap ETF (ISCB - Free Report) : This product, previously trading under the ticker JKJ, follows the Morningstar US Small Cap Extended Index and charges 4 bps in fees per year, down from 25 bps .
iShares Morningstar SmallCap Growth ETF (ISCG - Free Report) : This fund, previously trading under the ticker JKK, now tracks the Morningstar US Small Cap Broad Growth Extended Index rather than Morningstar US Small Growth Index. Its expense ratio has been lowered to 0.06% from 0.30%.
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Blackrock Cuts Fee and Revamps Nine Style Investing ETFs
Amid cutthroat competition in the quickly growing $6 trillion ETF industry for rock-bottom fees, BlackRock has once again jumped on the bandwagon to cut annual fees for the $7.6 billion lineup of style ETFs.
The world’s biggest exchange-traded fund issuer has cut expense ratios on nine iShares Morningstar U.S. Equity Style Box ETFs to a range of 0.03% to 0.06% from 0.25% to 0.30%. The move reflects BlackRock’s commitment to being the leading ETF provider in all the segments of the industry, including the burgeoning thematic arena, according to the head of iShares Americas Armando Senra.
The fee reduction will boost Blackrock’s competitive edge, positioning the suite as the lowest cost style box ETF family in the industry. This is especially true, as Blackrock has been facing stiff competition, mainly from Vanguard Group, for asset flows and the latter’s products topped the fund flow list last year for the first time since 2013. The style box investing market has grown to over $1.7 trillion of assets under management and has already gathered over $24 billion in flows this year, representing 56% of 2020 total flows (read: 5 ETFs Most Loved by Investors Last Week).
Investors should note that Blackrock has lowered fees for the second time in a year. Last year in June, the issuer cut the expense ratio of its largest fund — iShares Core S&P 500 ETF (IVV - Free Report) — to 0.03% in order to match a rival product from Vanguard.
These suite of products focus on specific approaches such as company size, growth or value investing. Along with lower pricing, the suite has been given a new look, featuring a combination of new indices from Morningstar, new tickers, new fund names and share splits. These funds will now track the Morningstar Broad Style Indexes that were launched in January.
The revamped nine ETFs with the new features have been discussed below. Most of these products now have expense ratio in line with that of Vanguard’s:
iShares Morningstar Value ETF (ILCV - Free Report) : This ETF, previously named as iShares Morningstar Large-Cap Value ETF (JKF), now tracks the Morningstar US LargeMid Cap Broad Value Index instead of Morningstar US Large Value Index. With the change in index, the fund now has a broader approach to the value investing in both the large and mid-cap securities. Expense ratio has been lowered from 0.25% to 0.04% (read: 3 ETFs to Invest in Cheapest Value Stocks).
iShares Morningstar U.S. Equity ETF (ILCB - Free Report) : This fund, previously named iShares Morningstar Large-Cap ETF (JKD), with expense ratio of 0.20%, will now charge just 3 bps in annual fees. It now offers exposure to both large and mid-cap securities rather than only large caps.
iShares Morningstar Growth ETF (ILCG - Free Report) : This fund targets the growth segment of the large and mid-cap space and charges 4 bps in annual fees. Previously, it was trading in the name of iShares Morningstar Large-Cap Growth ETF (JKE) with an expense ratio of 0.25%.
iShares Morningstar Mid-Cap Value ETF (IMCV - Free Report) : This fund, previously trading under the ticker JKI, offers exposure to the value corner of the mid-cap segment and tracks the Morningstar US Mid Cap Broad Value Index. Its expense ratio has been lowered to 0.06% from 0.30%.
iShares Morningstar Mid-Cap ETF (IMCB - Free Report) : This fund, previously trading under the ticker JKG, now tracks the Morningstar US Mid Cap Index rather than Morningstar US Mid Core Index. It will charge 4 bps in annual fees, down from the previous 25 bps annual fees.
iShares Morningstar Mid-Cap Growth ETF (IMCG - Free Report) : This ETF provides exposure to the growth corner of the mid-cap segment with an expense ratio of 0.06%. Previously, it traded under the ticker name JKH with an expense ratio of 0.30%.
iShares Morningstar SmallCap Value ETF (ISCV - Free Report) : This ETF’s investment objective also remained targeting the small-cap value space but it now tracks the Morningstar US Small Cap Broad Value Extended Index rather than Morningstar US Small Value Index. Expense ratio has been reduced to 0.06% from 0.30%. Previously, it traded under the ticker name JKL (read: A Guide to Small-Cap Value ETF Investing).
iShares Morningstar SmallCap ETF (ISCB - Free Report) : This product, previously trading under the ticker JKJ, follows the Morningstar US Small Cap Extended Index and charges 4 bps in fees per year, down from 25 bps .
iShares Morningstar SmallCap Growth ETF (ISCG - Free Report) : This fund, previously trading under the ticker JKK, now tracks the Morningstar US Small Cap Broad Growth Extended Index rather than Morningstar US Small Growth Index. Its expense ratio has been lowered to 0.06% from 0.30%.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>