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BlackRock introduces ‘low-cost’ iShares infrastructure and real estate ETFs

By Reporter
3 minute read

The firm plans to launch the lowest-cost infrastructure and real estate ETFs in the Australian market.

BlackRock Australia has revealed that it plans to expand the range of low-cost building blocks available to investors and advisers under its iShares brand with the launch of two new ETFs.

The newly announced iShares Core FTSE Global Infrastructure (AUD Hedged) ETF (GLIN) and iShares Core FTSE Global Property ex Australia (AUD Hedged) ETF (GLPR) are set to become available on the ASX later this month.

Both ETFs will be priced at 20 basis points, which BlackRock indicated is less than half the current management fee of similar ETFs that are available in the Australian market.

“Today’s announcement of our intent to introduce the lowest-cost global infrastructure and global real estate ETFs in Australia underscores our commitment to deliver advisers and investors the most efficient suite of core building blocks in the market,” commented Jason Collins, deputy head of BlackRock and head of iShares Australia. 

“Australian institutional investors have long considered global infrastructure and global real estate core assets for asset allocation purposes because they typically offer consistent income streams, inflation resilience, as well as potential long-term capital appreciation benefits.”

BlackRock explained that GLIN will be benchmarked to the FTSE Developed Core Infrastructure 50/50 AUD Hedged Index and will offer Australian investors access to global infrastructure companies listed in developed markets.

Meanwhile, GLPR will be benchmarked to the FTSE EPRA Nareit Developed Ex Australia Rental AUD Hedged Index. It will offer investors access to global (ex-Australia) real estate investment trusts (REITs) and listed companies spanning across office, commercial, retail, industrial, and other sectors.

“BlackRock is pleased to be able to leverage our global scale, technology, and portfolio construction insights to the Australian market, with the aim of further growing the ETP and advice market in Australia and democratising investing more broadly,” said Mr Collins.

The introduction of the two new low-cost ETFs follows on from fee reductions announced by BlackRock in February on its iShares Core S&P/ASX 200 ETF (IOZ) and the iShares Core Composite Bond ETF (IAF).

“The addition of low-cost global property and global infrastructure ETFs further bolsters our local iShares Core ETF range, allowing allocators and advisers more room in their fee budget for higher cost alpha and alternative strategies or for more tactical and granular ETF exposures which may be appropriate in the current investment environment,” said Chantal Giles, head of wealth, BlackRock Australasia.

“BlackRock believes more Australians would benefit from access to financial advice, and today’s move by iShares further reduces the input cost in investing which we hope contributes to meaningful growth in the industry.”

David Ho, head of Pacific, index investments group at FTSE Russell, said that the firm was delighted to be launching two new products with iShares linked to its FTSE EPRA Nareit Developed Ex-Australia and FTSE Developed Core Infrastructure 50/50 indexes.

“This collaboration demonstrates our commitment to innovation and delivering the best solutions to our customers in the Pacific,” he stated.