ETF Fee Cuts Prompt Analyst Upgrade

Morningstar passive fund analysts have upgraded ratings on ETFs from iShares and db X-trackers, prompted by fresh round of fee cuts

Kenneth Lamont 10 May, 2017 | 11:05AM

A fresh wave of fee cuts from iShares and db X-trackers, Europe’s largest ETF providers, has prompted Morningstar analysts to upgrade two ETFs.

Amongst the cuts was the iShares S&P 500 Dist ETF (IUSA), which slashed its ongoing charge from 0.40% to 0.07%, bringing it into line with its accumulating stablemate the iShares Core S&P 500 ETF (CSP1).

In response, it has been upgraded from a Bronze to a Gold rating to match our most highly regarded S&P 500 trackers. The previous rating differential reflected the gaping disparity in price between the ETF and its direct peers, most of which charge a fee of less than 0.15%. The long overdue move lifts the fund from being an over-priced outlier to one of the very cheapest and best S&P 500 passive funds available.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
iShares Core S&P 500 ETF USD Acc GBP24,999.60 GBX0.04
iShares EURO STOXX 50 ETF EUR Dist GBP3,101.50 GBX0.00
iShares S&P 500 ETF USD Dist GBP2,501.00 GBX-0.14
X MSCI Emerging Markets Swap ETF 1C GBP3,525.00 GBX1.22
X MSCI Japan ETF 1C59.94 USD1.53

About Author

Kenneth Lamont  is a passive funds research analyst for Morningstar Europe.

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