UBS slashes fees across its entire range of ETFs

UBS has slashed the fees across its entire range of exchange traded funds in the hope of attracting smaller investors to its vehicles.

The price cuts average 35 per cent, with the total expense ratios for the UBS ETF range now varying between zero and 110 basis points, compared with zero and 127 previously.

Andrew Walsh, UK head of ETF sales at UBS Global Asset Management, said: “We have seen a very positive response from a wide range of clients, particularly institutional investors and wealth managers, and we are looking to pitch more aggressively to financial advisers.”

The price cuts apply to the A share class of UBS’s ETF range. The total expense ratios (TERs) have been reduced to match charges for the I (institutional) share class. UBS was unusual among ETF managers in offering two ETF share classes.

“We have decided to synchronise charges with uniform TERs across the A and I share classes of our ETFs to make them more accessible to investors,” said Mr Walsh.

The TER for the A class UBS FTSE 100 ETF has been cut from 35bp to 20bp. The A class UBS MSCI emerging markets ETF drops from 70bp to 45bp.

Mr Walsh said UBS was considering whether to unify the two share classes, but that this step would require consultations with regulators in Switzerland, Luxembourg and Dublin.

The minimum investment for the A class shares ranges from £6 to £124, and from £1,420 to £100,000 for the I class.

UBS’s ETF operations have attracted $824m in inflows in the first eight months of 2013, almost double the $418m gathered by the same time last year, according to ETFGI, a consultancy.

Last year, UBS staged the largest single ETF launch on the London Stock Exchange after listing 66 new products. Mr Walsh said UBS judged that its ETF business was making “good progress”, noting that its ETF team had grown from five to 30 over the past five years.