rtmark
LearnBonds.com

BlackRock cuts fees on biggest ETF to match Vanguard

Mohit Oberoi
Author: Mohit Oberoi

Last Updated: June 26, 2020

BlackRock, the world’s largest fund manager, has cut the fees on its largest ETF by one basis point, 0.01%, to match the charges of its rival Vanguard.

BlackRock would now charge 0.03% for its iShares Core S&P 500 ETF which has assets under management (AUM) of $195bn making it the second-largest ETF tracking the S&P 500. The largest S&P 500 ETF is State Street’s SPDR S&P 500 ETF with an AUM of $296bn. Vanguard ranks third and its S&P 500 ETF has an AUM of $124bn.

State Street charges a fee of 0.09% on its S&P 500 ETF which is three times what BlackRock and Vanguard charge.

However, State Street’s ETFs have a much higher volume. For instance, SPDR S&P 500 ETF has an average volume of 118 million daily while BlackRock’s S&P 500 ETF has an average daily volume of only 6.6 million. Higher volume help in reducing the bid-ask spreads and helps reduce costs for investors.

BlackRock manages $2trn of ETF assets, which is roughly a third of global ETF assets. While Vanguard trails BlackRock in ETF assets, it has managed to bridge the gap this year by amassing twice the ETF assets that BlackRock could garner in the first five months of 2020.

ETFs have gained in popularity over the last decade. The fact that many active funds have failed to beat the benchmark returns despite charging a higher fee has further increased the attractiveness of ETFs.

According to ETFGI, an independent research company, between 2005 and 2019, the number of ETFs has risen from 452 to 6,970 while the total ETF AUM has risen from $417bn to $6.1trn.

Warren Buffett, the most famous investor in the world, advised buying S&P 500 ETFs in Berkshire Hathaway’s this year’s annual shareholder meeting.

By investing in an ETF, one gets returns that are linked to the underlying index after accounting for the fees and other transaction costs. Ther is also a guide on how to trade in ETFs. You can also refer to our selection of some of the best online stockbrokers.

Trusted & Regulated Stock & CFD Brokers

Rating

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission

Rating

64 traders signed up today

Visit Now

75% of investors lose money when trading CFDs.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

Rating

What we like

  • Sign up today and get $5 free
  • Fractals Available
  • Paypal Available

Min Deposit

$0

Charge per Trade

$1 to $9 PCM

Rating

Visit Now

Investing in financial markets carries risk, you have the potential to lose your total investment.

Available Assets

  • Total Number of Shares999
  • US Stocks
  • German Stocks
  • UK Stocks
  • European Stocks
  • EFTs
  • IPOs
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 $1 - $9 per month
  • NASDAQ $1 - $9 per month
  • DAX $1 - $9 per month
  • Facebook $1 - $9 per month
  • Alphabet $1 - $9 per month
  • Telsa $1 - $9 per month
  • Apple $1 - $9 per month
  • Microsoft $1 - $9 per month

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Mohit Oberoi

Mohit Oberoi is a freelance finance writer based in India. he has completed his MBA with finance as majors and also holds a CFA charter. He has over 13 years of experience in financial markets. He has been writing extensively on global markets for the last six years and has written over 6,500 articles. He mainly covers metals, electric vehicles, asset managers, and other macroeconomic news. He also loves writing on personal finance and topics related to valuation.