“Overall, this is not a price war. This is all about working with our clients,” says BlackRock CEO Larry Fink.
Monday’s launch of the emerging market ETF and the MSCI EAFE fund are notable because BlackRock already offers iShares MSCI Emerging Markets (NYSEArca: EEM) and iShares MSCI EAFE (NYSEArca: EFA). The new funds will have lower expense ratios, although the two existing ETFs are extremely liquid with very narrow bid/ask spreads.
Last week, Fink said aside from ETF expense ratios, total costs also include bid/ask spreads and index tracking error.
BlackRock has also emphasized that there are different user groups of ETFs, including short-term traders as well as buy-and-hold investors.
“Because investors that seek core portfolio products to buy and hold for the long term value price over other attributes, we have created a suite of products tailored just for them,” BlackRock’s Kapito said.