The acquisition of exchange traded fund (ETF) provider iShares and Barclays Global Investors by BlackRock last month wasn’t greeted by the same level of fanfare seen when the proposition was first introduced. Still, it’s an event worth taking notice of.
Many believed that BlackRock (NYSE: BLK) would expand on its actively managed and fixed income lineup following its acquisition of iShares, writes Helen Fowler for Index Universe. But right now, the focus seems to be more on continuity.
BlackRock CEO Laurence Fink has already stated that he had no plans to raise expense ratios on iShares funds. In fact, the economies of scale may even allow room for a reduction in fees. [BlackRock CEO’s plans.]
Rory Tobin, head of the international iShares business, says that there is actually “more interest among the ETF issuer community than our client base” for active ETFs. Tobin believes that more work will be done in developing products that will deliver on performance expectations before new active ETFs will come out. [More on the iShares/BlackRock deal.]
BlackRock has become the largest money manager with more than $3 trillion in assets under management, including assets in both passive and active management. iShares has more than 400 products, which make up a 47% market share. The next largest competitor is State Street Global Advisors, with around 16% market share.
Bradley Kay, ETF analyst at Morningstar, thinks BlackRock will be able to help iShares mold its portfolios to better track indexes and arrange better index sampling. The strong financial backing of BlackRock will also help iShares develop its European ETF Market.
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.