Specialized exchange traded fund strategies have attracted investment interest due to their alternative beta or “enhanced” indexing styles, but as more sponsors eye the space, fees could begin to stand out.
More investors are using alternative beta products, like low-volatility or minimum-volatility ETFs, fundamentally weighted ETFs and other factor-based index ETFs as a part of a core allocation strategy, reports Jackie Noblett for Ignites. [ETF Fees: Competition is a Good Thing]
Industry observers believe that a combination of ETF growth in targeted niche strategies and assets could drive expenses lower.
For instance, Invesco PowerShares has made a pre-emptive move against would-be competitors, lowering fees on its smart beta products by 21 to 36 basis points across six ETFs.
“We believe the lower fees better align the six funds with our existing offerings and help position the PowerShares family of ETFs for continued growth,” Ben Fulton, former managing director of global ETFs at PowerShares, said in a statement at the time.