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Asset managers offering exchange traded funds, or ETFs, are making a push to cement the mutual fund alternative as a legitimate option for investors in Europe. BlackRock is the latest investment service institution looking to make a splash in European markets through their announcement last Monday of a 14 ETF package that features six with discounts as high as 58% as well as eight new listings.
This move by the New York based firm is hardly a pioneering one, however. BlackRock rivals Amundi and Deutsche Asset & Wealth Management pulled off similar cuts in their ETF prices near the start of the year to encourage the entry of new retail investors.
BlackRock is currently the world’s largest asset manager boasting assets with a total worth of more than $4.4 trillion. The company is eyeing to expand in Europe through their ETF arm iShares which, with its assets equalling almost half the market at $211 billion, is already the continental leader. BlackRock and iShares have said that ETFs in the region have experienced a robust growth of 28% annually during the last five years, providing proof that it is finally coming of age among investors after originally being just a tool for institutions.
To stave off Vanguard, their major competitor in the market and also one of the world’s largest mutual fund providers who has had a excellent showing in the UK, BlackRock offered its fund based on the S&P 500 at a discounted 7 basis points, less than half of its original 15 and also a solid 2 points below the offer Vanguard.
Part of ETFs rise in popularity is its appeal as a low cost alternative alongside other fund management options. Their uniqueness lies in their shares-like nature of having price variances within a day making them easy to trade in market exchanges and alluring to speculators.
