That sound you just heard was the latest shot fired in Canada’s ETF price war. iShares has just slashed the management fees on several popular equity and bond ETFs—and just like that the country’s oldest ETF provider has become the cheapest in many categories.
BlackRock has rebranded nine ETFs as the iShares Core Series, “a suite of funds covering key asset classes.” A balanced portfolio of these ETFs now has a weighted management fee of just 0.12% or so, less than half the former cost. (As a rule of thumb, expect the full MERs to be 8% to 10% higher due to taxes.) Here’s what a traditional Couch Potato portfolio might look like when assembled from the Core Series ETFs:
iShares S&P/TSX Capped Composite (XIC)
iShares S&P 500 (XUS)
iShares MSCI EAFE IMI (XEF)
iShares MSCI Emerging Markets IMI (XEC)
iShares High Quality Canadian Bond (CAB)
The cost of competition
BlackRock launched a family of Core iShares ETFs in the US back in October 2012.