“iShares tends to be one of the most expensive ETF providers,” Gordon Rose, a passive fund analyst at Morningstar, said in the article. ” [DeAWM] is cheaper. If [DeAWM] keeps the fees the same, that will put some pressure on iShares in terms of costs going forward.”
Market observers also argue that DeAWM’s move could put pressure on other synthetic ETF providers, like Société Générale’s Lyxor and Amundi, to make the switch as well.
“It will put pressure on some of the pure synthetic providers,” Rose added. “There will be a lot of pressure on Lyxor.”
For more information on the ETF industry, visit our current affairs category.
Max Chen contributed to this article.