Environmental, social and governance (ESG) investing themes are a growing part of the broader exchange traded funds landscape. At least one ETF issuer is working to make ESG funds more affordable.
BlackRock’s iShares brand, the world’s largest ETF issuer, revealed it is lowering fees on several of its ESG ETFs. The issuer also said it is lowering fees on eight of its fixed income ETFs.
“The company lowered fees by as much as 20 basis points at the offerings, which total about $204 million in assets, according to a Securities and Exchange Commission filing. It also made reductions of about 2 basis points on eight bond ETFs. The 11 funds have total assets under management of about $4 billion,” reports Bloomberg.
The iShares MSCI EAFE ESG Optimized ETF (NASDAQ: ESGD) saw its annual expense ratio cut in half to 0.2% from 0.4%. That ETF has nearly $123 million in assets under management. ESGD tracks the MSCI EAFE ESG Focus Index, an ESG alternative to traditional EAFE exposure.
The iShares MSCI EM ESG Optimized ETF (NASDAQ: ESGE) now has an annual fee of 0.25%, down from 0.45%. ESGE is about 14 months old and has over $75 million in assets. The ETF tracks the MSCI Emerging Markets ESG Focus Index.
“The move by BlackRock is the latest in a series of fee cuts made as firms compete to win assets. Last October, the firm pared expense ratios on 15 ETFs mostly offered to price-sensitive retail customers and financial advisers. That resulted in significant inflows. Even as money managers expand socially responsible offerings, they’ve found it difficult to win over investors,” according to Bloomberg.
The iShares MSCI USA ESG Optimized ETF (NASDAQ: ESGU), which debuted in December, now has an annual fee of 0.15%, down from 0.28%. That ETF is a US-focused ESG fund.
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