Exchange-traded fund providers are reluctant to call it a price war, but that has not stopped ETF fees from heading lower, with some barely more than the cost of administration. While economies of scale can offset this, some fund managers are turning to smart beta products to make up the shortfall.

In November, both BlackRock and rival Charles Schwab cut fees in the US on a key product to just 0.03%. BlackRock also reduced fees on six other of its iShares ETF range of passive products, while Charles Schwab said it would consider further cuts.