UBS Asset Management has created an in-house S&P 500 tracker for its wealth management division which will provide passive exposure at a significantly low cost compared to iShares S&P 500 ETF.
The company had used the iShare ETF in its multi-asset portfolios, and led to annual costs of 0.4%.
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The new in-house tracker will perform the same work at a tenth of the cost of iShare ETF and will cost only four basis points, reports Fund Web.
James Mulford, UBS Wealth executive director, stated that the new development is aimed at securing better deals for its clients. He said: "We couldn’t get that exposure – that liquid and that cheap – in the market so we created it ourselves."
UBS Wealth, which seeded the fund, moved £450m from the iShares holding to the new passive fund in September.
The new fund is a unit trust, and not an ETF.
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