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BlackRock Broadens Its iShares Core Lineup

Low-cost lineup adds U.S. growth, dividend, and value ETFs and more foreign and bond ETFs.

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On June 10, BlackRock announced the doubling in size of its "iShares Core" lineup of building-block exchange-traded funds, which are aimed at offering investors broad, low-cost exposure to certain asset classes.

Around June 12, iShares is set to roll out four new ETFs and rebrand six others, all of which will receive new names and most of which will pick up new ticker symbols and price tags. Although these new funds will be part of iShares' Core suite, the expanded set of 10 ETFs will be known as "iShares Core Select" ETFs.

The move clearly demonstrates iShares' commitment to its suite of "Core" funds, which launched in October 2012. On the equity side, the Core suite now will branch into several targeted geographic regions, including Europe and Asia, with new low-cost offerings that can act as substitutes for existing, higher-priced iShares offerings, such as  iShares Europe (IEV) (0.60%) and  iShares MSCI Pacific ex-Japan (EPP) (0.50%). It's worth noting that the new Europe and Asia ETFs will track all-cap MSCI benchmarks.

Also, the suite has added several strategic beta ETFs (per Morningstar's definition), which are devoted to dividends and growth and value factors. Three strategic beta funds will join the suite with significantly lower prices than before. For example,  iShares High Dividend (HDV), which will take on the new name iShares Core High Dividend, will see its expense ratio drop to 0.12% from 0.40%. (Its index and ticker symbol will not change.) Similarly, the price tags for  iShares Russell 3000 Growth (IWZ) and  iShares Russell 3000 Value (IWW) will fall to 0.09% from 0.25% and 0.26%, respectively. (The funds' names will change and their tickers have already changed, but their indexes will not.) A fourth strategic beta fund will be iShares Core Dividend Growth (DGRO). DGRO and HDV both track Morningstar indexes (Morningstar licenses the index and collects asset-based fees.)

Interestingly, some other iShares strategic beta funds remain outside the "Core" lineup, such as  iShares Russell 1000 Growth (IWF) and  iShares Russell 1000 Value (IWD), both of which continue to charge 0.20%.

New Funds, With Their Expense Ratios and Indexes

  • IShares Core Dividend Growth ETF DGRO(0.12%):Will track Morningstar Dividend Growth Index.
  • IShares Core MSCI Europe ETF (IEUR) (0.14%): Will track MSCI Europe IMI Index.
  • IShares Core MSCI Pacific ETF (IPAC) (0.14%): Will track MSCI Pacific IMI Index.
  • IShares Core Total USD Bond Market ETF (IUSB) (0.15%): Will track Barclays U.S. Universal Index.

Changes to Existing Funds That Will Join the Suite

  • IShares Russell 3000 Growth (IWZ) will become iShares Core U.S. Growth (IUSG); expense ratio will fall to 0.09% from 0.25%.
  •  IShares Russell 3000 Value IWW will become iShares Core U.S. Value (IUSV); expense ratio will drop to 0.09% from 0.26%.
  • IShares High Dividend HDV will become iShares Core High Dividend HDV; expense ratio will fall to 0.12% from 0.40%.
  •  IShares Credit Bond (CFT) will become iShares Core U.S. Credit Bond (CRED); expense ratio will drop to 0.15% from 0.20%.
  • IShares U.S. Treasury Bond (GOVT) will become iShares Core U.S. Treasury Bond GOVT; no change to expense ratio.
  • IShares GNMA Bond (GNMA) will become iShares Core GNMA Bond GNMA; expense ratio will fall to 0.15% from 0.25%.

 


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