BlackRock to Cut ETF Fees on 6 Funds

by Kyle Woodley | October 16, 2012 11:02 am

Fund provider BlackRock (NYSE:BLK[1]) finally announced some long-anticipated fee cuts to its iShares exchange-traded funds on Monday, but they were less than expected, giving a boost to BLK shares Tuesday morning.

The Wall Street Journal reported that BlackRock will cut fees on six ETFs[2] — four stock and two bonds — as part of a movement into a new “Core Series” initiative, meant to help the company better compete against Vanguard and other rivals: The funds currently under that umbrella that will see lower fees:

* Will become ITOT      ** Will become ILTB

The company also plans to roll out three international stock ETFs and a bond ETF on Oct. 22:

An analyst at Bernstein Research told Reuters[9] that “The fee cuts will lead to an annual revenue loss of $35 million to $40 million and reduce earnings per share by less than 1 percent,” which was well below estimates, and had investors bidding up BLK shares more than 2% in Tuesday morning trading.

Kyle Woodley[10] is the Assistant Editor of InvestorPlace.com[11]. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at @IPKyleWoodley[12].

Endnotes:
  1. BLK: http://studio-5.financialcontent.com/investplace/quote?Symbol=BLK
  2. BlackRock will cut fees on six ETFs: http://online.wsj.com/article/SB10000872396390443854204578058862849412072.html
  3. ISI: http://studio-5.financialcontent.com/investplace/quote?Symbol=ISI
  4. IVV: http://studio-5.financialcontent.com/investplace/quote?Symbol=IVV
  5. IJH: http://studio-5.financialcontent.com/investplace/quote?Symbol=IJH
  6. IJR: http://studio-5.financialcontent.com/investplace/quote?Symbol=IJR
  7. AGG: http://studio-5.financialcontent.com/investplace/quote?Symbol=AGG
  8. GLJ: http://studio-5.financialcontent.com/investplace/quote?Symbol=GLJ
  9. told Reuters: http://www.reuters.com/article/2012/10/16/us-blackrock-etfs-shares-idUSBRE89F0VH20121016
  10. Kyle Woodley: http://www.investorplace.com/author/kyle-woodley/
  11. InvestorPlace.com: http://investorplace.com/
  12. @IPKyleWoodley: https://twitter.com/#!/kylewoodley

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