News | 01.29.20
‘Fee War’ Sticky Wicket for Managers of Active, ESG ETFs
By the end of 2019, the asset-weighted average annual expense ratio for overall U.S.-listed exchange-traded funds (ETFs) was 0.2 percent compared with 0.23 percent two years earlier, according to FactSet, presenting a challenge for managers of actively managed and environmental, social, and governance ETFs. For active ETFs, the ratio dropped to 0.8 percent at the end of 2019 from the previous year, and among ESG-focused ETFs, the ratio dropped even more significantly to 0.21 percent from 0.27 percent. "ESG and active management in the equity space hosted riveting fee wars," said Elisabeth Kashner, FactSet's director of ETF research. "The experience of active managers who are already competing in the ETF marketplace can be informative for those who are gearing up to launch non-transparent active ETFs."
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