While much of the focus has been on fixed income in an era of higher for longer interest rates, overexuberance in equities has been a major concern for investors with many split on how far the AI-driven rally can go.
Within this, fees have also been a huge story within equity ETFs over the past few months, most notably when State Street Global Advisors created Europe’s cheapest US equity ETF when it cut the fees on the SPDR S&P 500 UCIS ETF (SPY5) from 0.07% to 0.03% forcing others to follow suit.
This all happened when many in the industry were saying the cost of broad beta equity ETFs could not get much lower. Why then, are so many assets still lingering in more expensive legacy ETFs often tracking the same index?
For example, the iShares MSCI World UCITS ETF (IWRD) launched in 2005 with a TER of 0.50%. This was undercut by the launch of the $81.3bn iShares Core MSCI World UCITS ETF (SWDA) in 2009 with a TER of 0.20%.
However, the former still holds $7.3bn assets under management. Is it investor inertia? Fee grabbing from asset managers? Or perhaps there are more structural reasons behind the phenomenon.
The September 2024 issue of ETF Insider focuses on the dynamics behind this phenomenon and whether it is likely to change.
Also inside are the usual segments such as ETF of the Month (p.13), Fund Fights (p.15) and Expert Investors, where ETF Stream interviews fund selectors on the role of ETFs within their asset allocation (p.11).
In this issue:
Vanguard ownership limit warning (p.7)
ETF Buyers Club: Is it time to get more active in the US (p.18)
Volatility incoming: What next for tech ETFs (p.24)
Leader: High-fee legacy ETFs exposed (p.30)
Beyond Beta: Liquidity transformation: The final frontier? (p.38)
Sponsored content from Invesco and JP Morgan Asset Management:
Investors understand synthetic ETF ‘reality’ (p.26)
Is ChiNext 50 the new Nasdaq-100? (p.32)
Unpacking the benefits of JP Morgan AM’s Research Enhanced Index ETFs (p.36)
ETF Insider is only available to professional investors and members of the ETF industry in Europe. To access the full issue of ETF Insider, click here.
