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As the ETF world has expanded in recent years, there has been a race to the bottom so to speak, in terms of ETF expenses. Many firms have slashed costs in order to be the cheapest ETF in a particular category, hopefully giving their funds a decided advantage over the competition.

While it may take quite some time, this trend towards lower expense ratios by investors has often been the case in the ETF world across a variety of products. Seemingly with nearly identical funds that have solid trading volumes, new investors have done the right thing for their own accounts and have gravitated towards the lower cost funds (read Five Cheaper ETFs You Probably Overlooked).

A great example of this can be seen in the emerging market ETF world with the two MSCI Emerging Market Index following juggernauts, VWO and EEM. For quite some time, EEM was by far the largest in the emerging market ETF category, crushing all other funds in terms of AUM.

However, this has changed in recent years, largely thanks to the expense differential between the Vanguard fund (VWO), and iShares’ version (EEM - Free Report) . Currently, both funds track the exact same index but EEM charges 67 basis points a year in fees while VWO costs just a fraction of that at 20 basis points annually.

Largely due to this differential, as well as the fact that both funds track the same index, investors have made VWO their ETF of choice for the emerging market space. In fact, according to data, over the past three years VWO has seen $42 billion in inflows while EEM has seen just $220 million in new dollars, a seismic shift in the emerging market ETF landscape.

However, this isn’t the only time that iShares loses out to its competitors on a cost front by any stretch of the imagination. Instead, iShares is often lagging behind its smaller competitors like Vanguard, Charles Schwab, or State Street in a number of important ETF categories across a number of asset classes.

For example, in the large cap space, Vanguard leads the way with the cheapest fund over iShares and their IVV, while the cheapest sector ETFs are often dominated by the SPDR lineup from a cost perspective (also see Banking ETFs 101).

Meanwhile the trend is no better in other asset classes besides equities as PIMCO and Schwab easily beat out the iShares product line on a cost front in the bond market, while the trend is especially apparent in the real estate ETF segment with Vanguard crushing the competition.

This trend, as well as the steady asset move away from high cost funds to cheaper ones that have largely the same focus, has put the pressure on iShares to become more cost competitive at least according to some analysts in the space. However, while iShares is taking some steps to rectify this in a number of segments, there are a few categories in which it is the market leader.

Below, we highlight a few of these categories and the cheap iShares ETFs that are contained within them. While this isn’t meant to be an endorsement of these iShares products over the others in the space, it should at least prove to some investors that iShares is by no means ‘the expensive’ ETF issuer across the board.

Instead it should show that the San Francisco-based firm is just as capable of beating its competitors on cost as the much vaunted iShares, State Street, or newcomer Schwab often are for their respective products. In light of this, we have highlighted five cases in which iShares, despite its reputation as a high-cost ETF issuer, is actually the cheapest option in the space:

Russia ETFs

In the Russia ETF world there are currently four unleveraged choices available to investors. Currently, the Market Vectors Russia ETF (RSX) leads the way in terms of total AUM coming in at $1.7 billion in assets.

However, the fund is actually in the middle of the road when it comes to expenses, charging investors 62 basis points a year in fees. Meanwhile, iShares has the MSCI Russia Capped Index Fund (ERUS - Free Report) as a relatively new and cheaper competitor (read Is Now The Time To Buy Russia ETFs?).

This product charges investors 58 basis points a year in fees, just edging out RSX and State Street’s RBL for title of ‘cheapest Russia ETF’. However, ERUS has just $150 million in assets, a respectable figure, but nowhere near what RSX has amassed since its inception.

India ETFs

The Indian economy is quickly growing and so is the ETF market tracking the country. While just a few funds were initially tracking the nation, there are now 10 products tracking India without leverage.

Easily the most popular is the WisdomTree India Earnings Fund (EPI) which has about $1 billion in assets, although hit does charge investors 83 basis points a year in fees. This figure also represents the middle of the road for the category, as there are a few in the high 80s and one in the low 90s for expenses, including iShares’ INDY at 0.91% (read India ETFs: Getting Back on Track?).

Still, iShares also dominates the low expense side of the curve with two of the cheapest funds in the space. By far the least expensive is the iShares MSCI India Index Fund (INDA - Free Report) which costs investors a paltry 65 basis points in comparison.

This crushes the market leader by 18 basis points, and is nine basis points cheaper than the next fund on the list. Still the product is relatively new, having debuted in February of this year, so it has not attracted a significant following. However, it does demonstrate that iShares is beginning to shift towards the low cost model, at least in some of its newer country specific ETFs.

Gold ETFs

The gold market also represents a location in which iShares is the cheapest choice. This is important as gold ETF investing has really surged among many over the past few years, especially as gold bullion has run up in price. In fact, there was a short time in which there were more assets under management in the top gold ETF than there were in SPY.

Although this is no longer the case, gold remains an important ETF category for a least a few issuers. This is especially the case for State Street and their impressive GLD. This fund is not only one of the most well-known ETFs in the world, but is also one of the more popular, having amassed nearly $70 billion in assets at time of writing (read Shine & Protect Your Portfolio with Gold ETFs).

However, the fund is somewhat expensive costing 40 basis points a year in fees. This contrasts to a slightly cheaper choice from ETFS with SGOL and the rock-bottom expense ratio from iShares and their (IAU - Free Report) .

IAU, much like GLD, tracks the price of gold bullion and trades in truly impressive amounts that result in penny wide bid/ask spreads. However, the fund is still overlooked in favor of the more well known GLD, despite this cost differential.

There is some hope that this may finally be reversing, but investors are still piling into GLD over IAU for many portfolios. Nevertheless, IAU does represent one of the best strikes that iShares has made to be the low cost competitor in a particularly popular ETF category in which it doesn’t have the first mover advantage.

Let us also not forget that $10 billion under management is nothing to sneeze at, and the low cost has also probably helped the fund to block other smaller competitors in the space as well, suggesting that iShares’ strategy in this product may be better than what we think.

China ETFs

China has been an extremely popular market for quite some time thanks to its high growth rate, huge population, and incredible rise over the past few decades. For at least a few years, investors regarded the iShares FTSE China 25 Index Fund (FXI) as the only real way to play the nation, as evidenced by the nearly $4.3 billion in total assets.

However, the fund is extremely concentrated and is somewhat expensive, charging investors 72 basis points a year in fees. While this didn’t matter when there was just a handful of other China funds on the market, there are now roughly 18 products tracking the nation, giving investors a great deal of choices in the country (see Three China ETFs Still Going Strong).

To rectify this, iShares launched the MSCI China Index Fund (MCHI) in 2011 as a low cost alternative in the space. The fund has definitely caught on—having amassed about $350 million—while also just edging out the more popular GXC from State Street for the cheapest fund targeting the People’s Republic.

Broad Latin America ETFs

For targeting the broad Latin America region, there aren’t exactly a lot of choices. In fact, there are just half a dozen in total (if you are willing to count AND as well) while less than $2 billion is in the space.

Still, iShares dominates having the two cheapest funds in the space including the behemoth of the segment ILF. This fund charges 50 basis points a year in fees and with another iShares fund, , they take up both the top spots for cheapest ETFs.

It is also worth noting that ILF besides being one of the cheaper options, is also the biggest by far, making up roughly 91% of assets in the broad Latin America market. Clearly, the combination of the first mover advantage as well as the ultra-cheap expense ratio has been a winning combination for iShares in this category over the years (read Forget Argentina, Buy These Latin America ETFs Instead).

Perhaps given the success of some of the funds listed above, and iShares clear desire to stave off competition from low cost competitors, the firm will reduce the expense ratios on some of their more ‘expensive’ funds in the near future.

After all, it is pretty clear that investors prefer cheaper products, no matter who the issuer is, suggesting that if iShares wants to maintain its dominant lead in the space it will have to shed its ‘high-cost’ label and embrace low cost ETF investing, much like it has done in the above listed five categories.

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author is long VWO and IAU.

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