For its part, Invesco is more than halving the cost of some of its most popular new funds. The 10 investment-grade debt products, which have a defined-maturity date like bonds and will continue to trade under the BulletShares brand, will charge 0.10 percent, down from a 0.24 percent management fee previously. Invesco will also look to expand both the range and reach of these products, Draper said.
More than 50 percent of inflows this year have gone to ETFs that charge less than 0.10 percent, data compiled by Bloomberg show. Invesco’s ETFs -- before the acquisition and fee cuts -- averaged 0.49 percent.
Invesco’s purchase is its second major deal in less than a year, after its August acquisition of Source, a European issuer. It’s in this light that Draper sees the competitive landscape not as a battle for U.S. dominance, but about positioning Invesco as a global player.
“Source and now Guggenheim really put us in a pretty strong position,” said Draper. The firm could consider bulking up further, but “there’s not a lot of scalable large firms that are really left that can be significant.”
This article was provided by Bloomberg News.