Van Eck announced this week that it has reduced the expense caps for five of its exchange-traded funds, effective May 1. The move represents the latest development in a string of fee reductions by ETF issuers, reflecting both increasing asset bases and economies of scale as well as efforts to lure cost-conscious investors. The ETFs affected by the latest round of fee cuts include the ultra-popular GDXJ, which currently has close to $2.5 billion in assets (see all Gold Miner ETFs here).
The ETFs impacted by the price cuts, along with the annual savings generated based on assets at the end of April, include:
|Ticker||ETF||Old Cap||New Cap||Savings*|
|AFK||Market Vectors Africa Index ETF||0.83%||0.78%||$57.7|
|BRF||Market Vectors Brazil Small-Cap ETF||0.65%||0.62%||$296.7|
|GDXJ||Market Vectors Junior Gold Miners ETF||0.59%||0.56%||$728.6|
|HAP||Market Vectors RVE Hard Assets Producers ETF||0.65%||0.59%||$158.6|
|NLR||Market Vectors Uranium + Nuclear Energy ETF||0.62%||0.60%||$37.5|
|*Annual savings based on assets as of 4/30/2011|
The price cuts translate into more than $1.2 million in annual savings on management fees for investors in the funds, and could help attract new assets to these five products. “We’ve been very pleased with the growth experienced by these funds over the course of the past year and are happy to be able to reduce fees for shareholders,” said Ed Lopez, Marketing Director at Van Eck Global (see all Van Eck ETFs here).
Last June, Van Eck reduced expense ratios on three emerging markets ETFs, including BRF (which went from 0.71% to 0.65%).
Disclosure: Long BRF.
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