Lyxor Asset Management has cut fees on its fixed income exchange-traded funds (ETFs) in order to “improve value” for investors at a time of low yields.
The reductions, which took place late last month, see the total expense ratios for the company’s gilt and treasury ETFs fall to 7 basis points, with the cost of its UK and US corporate bond ETFs dropping to 9 basis points.
Previously the total expense ratios for the seven products ranged from 15 to 22 basis points.
The company noted that fixed income ETFs had been “out of step with core equity exposures”, adding: “In a low-yield environment where for example two-year gilts yield less than 0.5 per cent, these costs significantly diminish an investor’s return.”
According to Lyxor, fixed income products now represent some 25 per cent of the total European ETF market.
