Huatai Pioneer’s CSI 300 ETF and related announcements have lowered the comprehensive fee rate to the lowest tier among its peers
On November 19th, China Tai Ping Fund announced that to better meet the investment and financial management needs of a wide range of investors, starting from November 22nd, it will adjust the management fees and custody fees for China Tai Ping Huatai Shanghai-Shenzhen 300 ETF and its linked funds, and revise relevant content in the corresponding fund contracts
After adjustments, the annual management fee for China Tai Ping Prudential Shanghai-Shenzhen 300 ETF and its linked funds has been reduced to 0.15%, and the annual custody fee has been reduced to 0.05%, both adjusted to the lowest tier of fees for index funds
Almost simultaneously, leading ETFs in the industry such as ChinaAMC CSI 300 ETF, ChinaAMC SSE 50 ETF, NFAT Zhongcai 500 ETF, JIA SHI CSI 300 ETF, and Yifangda Growth Enterprise ETF also announced reductions in management fees and custody fees, with rates all lowered to 0.15% and 0.05%, respectively
Unlike most ETF fee reductions in the past, this one was driven by proactive action from a product with scale advantages within the market, and will have a greater impact on the industry going forward. Exchange data shows that as of November 18th, the size of Caitong B&R CSI 300 ETF exceeded 370 billion yuan, making it the largest ETF in the current market.
The largest group of super ETFs has taken the lead in reducing fees, demonstrating a willingness to benefit investors and allowing them to invest in popular and liquid funds with higher value for money
Industry experts believe that fee reductions for ETFs with economies of scale will, on the one hand, help to fulfill the role of mutual funds in providing inclusive financial services, benefiting a wider range of investors by reducing holding costs, increasing potential returns, and enhancing their investment experience
On the other hand, low fees also help to further enhance the competitiveness of the product itself. With the support of liquidity absorption and cost operation advantages, the product is expected to attract more long-term incremental capital into the market, helping to build a good ecosystem for “long money, long investment.”
In recent years, thanks to its unique advantages such as flexible trading, high transparency, strong liquidity, and low investment threshold, broad-based ETFs have become a primary channel for investors entering the market with modest capital and pursuing long-term investments
This price reduction could become a sort of “accelerator,” making it easier for large investors to enter the A-share market
Afterword
The fixed-investment fund I chose, Tianhong Fund, hasn’t released an announcement yet, but it should follow suit. If there’s no update, I’ll have to consider switching funds.
Original management fee: 0.5%, custody fee: 0.1%. New management fee: 0.15%, custody fee: 0.05%. This is still a significant reduction.