Wednesday 1 April 2009
iShares Sale Bad News for ETF Investors?
GlobeInvestors' story today Barclays in talks to sell iShares to CVC makes me worry about the future of iShares. It's not that they won't continue, merely that such a sale may herald an attempt by new owners to milk the ETFs by raising the MERs they charge investors. In the US, there are cheap alternatives, notably those of Vanguard, but in Canada, iShares Canada really has a lock on passive, market cap weighted index ETFs and it would be more tempting and easier to raise fees. We'll have to wait and watch to see how this unfolds.
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There are the TD CanadaTrust online e-shares index funds, limited in number (12), but their MERs are all less than .5%.
More info on this page:
http://www.tdcanadatrust.com/mutualfunds/perf_EF.jsp
I'm also concerned that MERs on the iShares products might rise. Here's hoping that the BMO offerings (which in many cases double up on the asset classes/sectors that the iShares ETFs do) will help keep MERs in this space from rising.
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