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BlackRock’s iShares Lifting Fees on Some ETFs: Report


BlackRock’s iShares is raising fees on 40 ETFs in its lineup of 280 funds, effective Jan. 1, according to a report over the weekend.

The higher expense ratios will affect some of the firm’s largest ETFs including the $47 billion iShares MSCI Emerging Markets (EEM) , IndexUniverse reports.

A BlackRock (BLK) spokeswoman on Monday confirmed the iShares ETF fee hikes. The funds’ board of directors can assess the ETFs in terms of break-even points and assets under management, and set new fees for the coming year. The ETFs are assessed in groups rather than on a fund-by-fund basis, the spokeswoman said.

Most of the iShares fee increases only appear to be a couple or few basis points. For example, the management fee for EEM rises to 0.69% from 0.67%, reports Brendan Conway at Barron’s. Some iShares ETFs also had their expenses cut.

Earlier this year, the firm announced expense ratio cuts at several of its existing products. It also created new iShares Core Series targeting long-term investors.

At the time, BlackRock’s move was seen as a response to the firm losing market share in broad-based ETFs to cheaper products managed by Vanguard and other competitors. [BlackRock Hits Back at Vanguard, Schwab with iShares ETF Fee Cuts]

There is a fee war raging in the ETF business but so far the cost cuts have been centered in so-called core funds that focus on wide swaths of the stock and bond markets.

ETF providers are battling for market share in these broad-based funds where buy-and-hold investors and financial advisors see fees as a very important factor when selecting individual funds. [BlackRock ETF Fee Cuts Target Buy-and-Hold Investors]

Full disclosure: Tom Lydon’s clients own EEM.

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