iShares slashes charges on income-accruing S&P 500 ETFs

Apr 7th, 2014 | By | Category: Equities

iShares, the world’s largest provider of exchange-traded funds, has reduced the charges on two of its S&P 500 ETFs.

iShares slashes charges on income-accruing S&P 500 ETFs

iShares has more than halved the fees charged on two of their S&P 500 ETFs to 7 basis points.

The iShares S&P 500 UCITS ETF (Acc) (SACC) and the net total return iShares S&P 500 – B UCITS ETF (Acc) (CSP1), both of which are income-accruing funds, now come with total expense ratios (TERs) of just 0.07%, down from 0.15%.

Following these price changes, the two products are currently the cheapest physically replicated ETFs in the UK, pipping similar products from Vanguard and HSBC, which come with TERs of 0.09%.

This is the latest in a line of fee reductions – both of these saw price reductions September 2013.

Listed on the London Stock Exchange, SIX Swiss Exchange, Borsa Italiana, Deutsche Börse and NYSE Euronext, the funds offer exposure to the S&P 500 Index, an index comprising 500 leading US companies listed on the either the NYSE or Nasdaq.

The index is widely regarded as the best single gauge of large cap US equities and captures approximately 80% coverage of available market capitalization Globally, there is over $5.14 trillion benchmarked to the index, with index-linked passive products such as ETFs accounting for approximately $1.6 trillion of this total.

Adam Laird, Passive Investment Manager at Hargreaves Lansdown, said: “Lower costs is great news for investors. Prices have been falling consistently in ETFs and tracker funds and investors are benefitting. This change could put pressure on other providers to follow suit and drop charges on their funds further.”

He added: “Investors need to be careful, however. The larger, income-distributing iShares S&P 500 (Inc) (IUSA) has kept its annual charge at 0.40%, though the spread tends to be lower on this. Investors need to be careful and read the ETF’s documents to ensure they are investing in the right fund.”

IUSA has more than £13.62 billion in assets, compared to £1.25 billion and £1.53 billion for SACC and CSP1, respectively.

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