One of Old Mutual
's asset managers is fighting a pricing battle with three exchange-traded fund titans. Last month Old Mutual Global Index Trackers cut the expense ratio of its GlobalShares FTSE Emerging Markets Fund
from 39 basis points to 25 bps. IndexUniverse
's Cinthia Murphy frames
the cut as a way for Old Mutual to try to "challenge" similar offerings from iShares
, State Street
The GlobalShares fund appears to be cheaper than all three ETF giants' similar offerings. The Vanguard Emerging Markets ETF
costs 27 bps and boasts $24 billion in assets, while the iShares MSCI Emerging Markets Index Fund
costs 72 bps and has $35 billion in assets. And the SPDR S&P Emerging Markets ETF
costs 59 bps.
"We believe this will help demonstrate to Emerging Market investors that we can be the cost leader in this end of the market," stated Tendai Musikavanhu
, CEO of Old Mutual Global Index Trackers.
Old Mutual first launched the fund in December with no expense ratio through January 31, when it rose to 39 bps. The new 25 bps price will last for a year but could be extended. The Global Index Trackers unit works with $5 billion of Old Mutual's $450 billion in total assets.
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