(Reuters) - BlackRock Inc (BLK.N), the world’s largest money manager, is gaining customer inflows to its exchange-traded funds because of Vanguard Group’s decision to switch benchmarks on some of its funds, BlackRock Chief Executive Laurence Fink said on Wednesday.
“We are seeing flows into our existing products because of the changes of index providers with our competitor,” Fink said on a call with analysts.
Vanguard announced on October 2 that it would switch 22 of its largest funds from indexes provided by MSCI Inc (MSCI.N) to two lower-cost index providers. BlackRock said it was sticking with MSCI on its similar funds.
Vanguard denied that the index change was having a negative effect on its ETF flows. “Vanguard’s planned benchmark changes and the future associated cost savings have been very well-received by our clients,” spokesman John Woerth said. “Vanguard is leading the U.S. ETF industry with $41 billion in net cash inflow through September and our momentum continues unabated in October.”
Despite BlackRock’s own decision to cut management fees on four of its own ETFs, announced on Monday, Fink denied the ETF industry was engaging in a price war.
“This is not a price war. This is all about working with our clients,” Fink said on the call with analysts. “I think you guys, and we include the press, have created this myth about a price war stuff.”
Reporting by Aaron Pressman; Editing by Gerald E. McCormick and Phil Berlowitz