UBS cuts fees on flagship ETF amid assets growth

UBS has cut fees by 5 percentage points for the UBS ETF Barclays TIPS 1-10 Ucits ETF amid growing inflows into the fund.

Since 1 April 2017, the ETF’s unhedged share class are reduced from 0.20 per cent to 0.15 per cent while the currency hedged shares classes are reduced from 0.25 per cent to 0.20 per cent.

The £600m UBS ETF Barclays TIPS 1-10 Ucits ETF, which was launched in November 2016, has reached 470m inflows year to date.

The firm attributes the growth of the fund to concerns among investors of rising inflation in the US following Trump’s election as well as the expectations on policy change in the country.

The ETF tracks a benchmark of US Treasury Inflation-Protected Securities with shorter duration.

Global head of investment specialists passive & ETFs Clemens Reuter says: “After an extended period of low interest rates there is growing evidence in markets of inflationary pressures starting to build, particularly in the US. With this innovative fixed income product, our clients are able to protect long-term purchasing power and gain access to an asset class that compounds the real rate of return.”