Some BlackRock's iShares equity-sector exchange-traded funds will get slight expense ratio reductions effective Aug. 1, a Securities and Exchange Commission filing Tuesday showed.
The reductions are occurring as part of a "formulaic, mechanical" process known as "breakpoints," where changes in the aggregate assets under management for a group of funds can impact the expense ratios at the end of their fiscal year, a BlackRock spokesman said.
Funds that will see reductions include the iShares Biotechnology ETF, which will have its expense ratio dropped to 0.44% from 0.45%; iShares U.S. Medical Devices ETF, which will see a drop to 0.39% from 0.41%; and iShares Expanded Tech-Software Sector ETF, for which the expense ratio will drop to 0.4% from 0.43%.
The iShares Biotechnology ETF has net assets under management of $7.98 billion, while the iShares U.S. Medical Devices ETF's net AUM totals $6.7 billion, and the iShares Expanded Tech-Software Sector ETF's net AUM totals $4.3 billion.
While ETF fee cuts are sometimes undertaken to stimulate investor demand, Todd Rosenbluth, head of research at VettaFi, a data and analytics provider, said he suspected that wasn't the case here, and that the reductions were likely tied to asset growth.
"These are products that are already at scale," Mr. Rosenbluth said.
