BlackRock has cut the price of two iShares UK equities funds, including the country’s oldest and largest FTSE 100 ETF, and adjusted its Core series in a renewed focus on meeting UK investor interest in ETFs.
The price of the flagship distributing iShares FTSE 100 Ucits ETF (Dist) [ISF] fund is being reduced from 40 basis points to seven basis points. The fund was the first ETF to list on the London Stock Exchange in April 2000. With £3.8bn (€5.3bn) assets under management, it is the largest UK equities ETF. This change responds to the distinct preferences of UK-based investors, many of whom favour income distributing rather than income accumulating funds for their UK equity holdings.
The price of the accumulating iShares Core FTSE 100 UCITS ETF [CUKX] is also being reduced to seven basis points from 10 previously, equalising the fee level on both funds and making them the UK’s lowest priced FTSE 100 ETFs. As a result, the cost for every £100 (€140) invested in these funds drops from 40 and 10 respectively to seven pence.
As part of this change, BlackRock is adjusting its iShares Core series for UK clients. This range of ETFs launched in June 2014 to provide some of the most popular market exposures at some of the lowest prices in Europe. From today, the series will incorporate the distributing FTSE 100 ETF in place of the accumulating fund, making the range particularly attractive for long term UK equity investors.
The European iShares Core Series followed the launch of a similar Core series in the US in 2012 and in Canada in March 2014. The global Core ETF offering had flows of $32bn (€44.8bn) in 2014 and the funds had $196bn (€274.7bn) in global assets under management. Since launch in June 2014 the UK Core series has gathered $11.4bn (€16bn) in net inflows, representing 50% of total inflows into the iShares EMEA fund range over that period. With $11.6bn (€16.2bn) of net inflows year-to-date in Europe, iShares has had a very strong start to the year.
Fergus Slinger, head of UK sales at iShares commented: “As the FTSE 100 hits record highs, the price of investing in it is falling. The ETF market throughout Europe is growing hugely, and today’s changes are about ensuring the demand UK investors have for ETFs is met with the right products at the right price.
“We launched the iShares Core range for UK investors last June, and it has grown to over $22bn (€30.8bn) in nine months. During this time, we got a clear message from UK investors that they wanted to put distributing UK equity ETFs at the heart of their portfolios. We believe ETFs have an important role to play post the Retail Distribution Review and want to confirm our commitment to our clients in this market. We have responded to their needs by adjusting the range and lowering prices.
“As UK ETFs turn 15, we are providing a more cost-effective way to invest in domestic equities through ETFs than ever before. With these changes today we now have the most competitive FTSE funds in the market.”