Van Eck Global, the New York fund provider known for its Market
Vectors ETFs, cut the cost of its $530 million Market Vectors
Indonesia Index ETF (NYSEArca:IDX)-effective immediately-by 5
percent, making the fund the cheapest in its segment.
IDX, which until April 30 cost 0.60 percent, now has a net
expense ratio of 0.57 percent, undercutting its main competitor,
the $278 million iShares MSCI Indonesia Investable Market ETF
(NYSEArca:EIDO) by 2 basis points.
This is the second time Van Eck has cut IDX's price. When the
fund came to market three years ago, it had an annual net expense
ratio of 0.71 percent, but gains in economies of scale as the
fund's assets grow have allowed for increasingly lower costs.
IDX was the first ETF to serve up focused exposure to
Indonesia's equities market when it was launched in 2009. But since
then it has since been joined by iShares' EIDO as well as by the
Market Vectors Indonesia Small-Cap ETF (NYSEArca:IDXJ), launched
earlier this year with a net expense ratio of 0.61 percent.
Van Eck's original Indonesia-focused fund, which allocates
nearly a third of its portfolio to financials, has delivered strong
performance in its three-year history. IDX has had annualized
returns in the past three years totaling 54.1 percent, according to
data on Van Eck's website. Year-to-date, IDX is up some 5
"Indonesia's growth over the past several years has been
impressive, and we believe the outlook remains bright, driven in
part by rising domestic consumption and higher levels of disposable
income," Ed Lopez, marketing director at Market Vectors ETFs, said
in a press release.
The new expense ratio of 0.57 percent is capped contractually
until May 1, 2013, the company said on its website.
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