(Bloomberg) – Invesco Ltd. launched two new exchange-traded funds on Friday that will eliminate administrative costs by the end of the year, further escalating the ETF industry’s long-standing fee war.
The Invesco Nasdaq Biotechnology ETF (IBBQ) and Invesco PHLX Semiconductor ETF (SOXQ) will effectively cost nothing until December 17th. After that, everyone will carry an expense ratio of 19 basis points, according to a company press release.
$ 6.4 trillion worth of issuers in the ETF industry have been battling for the cheapest deals to grab assets for years as the total number of funds tops 2,400. Earlier this year, State Street Global Advisors cut fees on its two bond ETFs a day after BlackRock Inc. took a similar move.
Nevertheless, a zero-cost ratio is relatively rare, even for a limited period of time. BNY Mellon Investment Management launched the first royalty-free annuity fund and another royalty-free product to track large American companies last year. But so far, no other large asset manager has taken comparable steps.
The IBBQ fund will provide exposure to approximately 270 innovative biotechnology companies, including some that have helped with Covid-19 vaccines and treatments. Meanwhile, SOXQ will include 30 of the biggest names in the semiconductor industry.
Invesco has approximately $ 343 billion in ETF assets, according to Bloomberg, accounting for about 5.5% of the total US market.