Now that last week’s deal between BlackRock and Barclays Global Investors is a done one, many exchange traded fund (ETF) investors may be wondering what it means for them and the industry at large. The deal includes iShares’ popular line of ETFs.
The deal went through for $13.5 billion, and the new company will be renamed as BlackRock Global Investors, reports Joe Morris for Ignites. It still has to undergo regulatory scrutiny, and if it passes, it should close later this year, says Murray Coleman for Index Universe.
If you’re an iShares shareholder, you can relax. This deal will have no ill effects for you.
BlackRock’s CEO Laurence Fink says that they have no plans to raise the expense ratios of iShares ETFs. “I can say with total clarity they’re not going higher,” he told Fox Business on Friday. “We’re going to keep them where they are or bring them down.”
The deal does not include iPath, Barclays line of exchange traded notes (ETNs).
Fink also suggested that BlackRock may introduce actively managed ETFs down the line, as well. iShares currently holds 48% of the ETF market and has funds in 15 countries, so this deal and its impact are going to be closely monitored by investors and the ETF industry.
Barclays originally had a deal with CVC Capital Partners, but a clause in the contract allowed Barclays to continue to solicit other offers until June 18.
Mutually Beneficial?
The relationship could wind up being a complementary one, says Kathleen Pender for The San Francisco Chronicle. While BlackRock caters mainly to institutions, they’re weaker in areas where BGI is strong. BlackRock primarily manages bonds, money market funds and other fixed-income investments; BGI is dominant in stocks.