iShares has cut the fees on a number of its exchange traded funds (ETFs) which provide access to some of the mainstream markets most popular with investors, as well as launching a new fund - iShares Core MSCI Emerging Markets IMI Ucits ETF. This is one of nine of these lower-cost ETFs available in the UK, all of which are physically replicating - ie, they buy the securities they track.
iShares says the ETFs can be used as building blocks for long-term positions at the core of portfolios, and are some of the cheapest in Europe. All of the iShares Core Series equity funds listed in London are accumulating, meaning income from holdings is reinvested.
It follows Deutsche Asset & Wealth Management's expansion of its range of Core-ETFs with the launch of a physical replication fund, MSCI USA Index UCITS ETF, on Deutsche Boerse. It has an all-in fee of 0.09 per cent a year and provides exposure to the US large- and mid-cap market, tracking the performance of more than 600 shares. The ETF will list in London later this year.
iShares Core Series
| ETF | TER (%) | Old TER (%) |
| iShares Core FTSE 100 UCITS | 10 | 15 |
| iShares Core EURO STOXX 50 UCITS | 10 | 20 |
| iShares Core S&P 500 UCITS | 7 | 15 |
| iShares Core MSCI Japan IMI UCITS | 20 | 48 |
| iShares Core MSCI Pacific ex Japan UCITS | 20 | 48 |
| iShares Core MSCI World UCITS | 20 | 40 |
| iShares Core MSCI Emerging Markets IMI UCITS | 25 | na |
| iShares Core UK Gilts UCITS ETF | 20 | na |
| iShares Core £ Corporate Bond UCITS ETF | 20 | na |
Source: iShares
This comes as CUBE Investing launches structured products with a typically lower charge than is generally available. Its first two products, CUBE Rainbow Supertracker July 2020 and CUBE Balanced Dual Index Kick Out July 2020, can be bought via wraps and brokers until 1 July, with a fee of between 0.75p and 1.25p per note. This is different to many UK structured products for private investors, which are typically structured investments in a plan wrapper with charges of between 2 and 3 per cent, often purchased via an adviser.
"We wanted to launch a range of investments designed specifically to be bought through wrap and broker platforms, in the same way that investors buy ETFs," said David Stuff, director at CUBE Investing. "Not only does this allow investors to hold structured investments alongside their existing products, but by avoiding the costs associated with a plan, we believe this delivers better outcomes and value."
These two products are among the first structured products for private investors that are risk-rated. The rating is calculated on the same 1-7 scale currently used by funds in Key Investor Information Documents (KIIDs), so investors can match them to their risk levels and compare them with other investment products.
CUBE has back-tested the products and its research includes the calculation of an expected return, and the probability of different outcomes at maturity.
CUBE will publish updated research for its new products on its website www.cubeinvesting.com every week.
