Old Mutual Launches First ‘Zero Cost’ ETF; Fund Covers Emerging Markets
Tuesday, December 8th, 2009Michael Johnston submits:
Boston-based Old Mutual Global Index Trackers has launched its first ETF, listing the GlobalShares FTSE Emerging Markets Index Fund (GSR) on the NYSE Arca Exchange Tuesday. In order to compete in an increasingly crowded space, Old Mutual has thrown in an interesting twist: for a limited time, GSR will have an expense ratio of zero basis points, making it the first ETF listed under a “Zero Fee, Zero Cost” arrangement.
The ban on expenses will last until January 31, 2010, at which point GSR will cap its expense ratio at 0.39%. At this level GSR will still be cheaper than several emerging markets ETFs, such as EEM (0.72%) and GMM (0.59%), but will cost more than Vanguard’s low-cost VWO (which has an expense ratio of just 0.27%). Charles Schwab is planning to launch an emerging markets ETF in January of next year that will charge 0.35%.
