Buyers call for iShares to cut costs on UK ETFs

Fund buyers are calling on iShares to review the pricing of its range of UK exchange-traded funds (ETFs), especially the mainstream vehicles that are charging substantially more than their peers.

The total expense ratio (TER) for core iShares ETFs, such as the S&P 500, FTSE 100 and MSCI World, are significantly higher than peers such as Vanguard, and State Street’s FTSE All Share ETF. They are also ahead of the firm’s own, more niche ETFs, buyers have complained. For example, the iShares S&P 500 ETF has a TER of 40bps, compared to State Street’s version which costs 15bps, and Vanguard’s which is priced at 9bps. iShares’ popular FTSE 100 ETF also has a price of 40bps, well ahead of the 10bps Vanguard charges and the 30bps State Street charges. The prices of the mainstream...