On Monday, BlackRock's (BLK) iShares unit, the world's largest ETF sponsor, made perfectly clear to the ETF industry that it is not taking its rivalry with Vanguard, or any other firm for that matter, lightly. In what is arguably the biggest news of the year in the exchange-trade products business, iShares is making good on a promise to slash fees on some of its most popular ETFs.

The firm is also introducing a new suite of low-cost ETFs aimed at buy-and-hold investors, a market demographic that has been quick to warm to Vanguard and that firm's cheap ETFs. As part of the effort to better compete with Vanguard on the cost front, iShares will introduce the iShares Core Series, which will be comprised of four new and six existing funds.

Here are some of the most important details investors need to be aware of with iShares' new cost-cutting efforts.

Emerging Markets The iShares MSCI Emerging Markets Index Fund (EEM), the second-largest, emerging markets ETF, will remain as is. EEM lost ground in recent years to the rival Vanguard MSCI Emerging Markets ETF (VWO) because the former charges 0.67 percent per year compared to VWO's annual fees of 0.2 percent. However, EEM remains popular with institutional investors.

To accommodate cost-conscious retail investors, iShares will introduce the iShares Core MSCI Emerging Markets ETF on October 22. That fund will charge 0.18 percent. Do not be surprised if Vanguard responds by trimming VWO's expenses, especially if the iShares Core MSCI Emerging Markets ETF proves successful.

Bonds The iShares Barclays Aggregate Bond Fund (AGG) will become the iShares Core Total U.S. Bond Market ETF on Wednesday, according to the ETF's web page. More importantly, AGG's fees will be pared to 0.08 percent from 0.2 percent.

This is significant because AGG will be modestly cheaper than the Vanguard Total Bond Market ETF (BND). Both are far cheaper than the actively managed PIMCO Total Return ETF (BOND), which is aiming to steal assets from AGG and BND. AGG and BND are passively managed.

The iShares 10+ Year Government/Credit Bond Fund (GLJ) will become the iShares Core Long-Term U.S. Bond ETF (NYSE: ILTB). In addition to the ticker change, the "new" ETF will charge 0.12 percent per year compared with GLJ's current expenses of 20 basis points.

Challenging VTI One of the Vanguard's most popular ETFs is the Vanguard Total Stock Market ETF (VTI). Home to almost 3,300 stocks, the fund is one-stop shopping for investors looking for deep broad market exposure. With an expense ratio of 0.06 percent, VTI is cheaper than 95 percent of comparable funds, according to Vanguard.

iShares is making a run at VTI by changing the iShares S&P 1500 Index Fund (ISI) to the iShares Core S&P Total U.S. Stock Market ETF (NYSE: ITOT) and shaving the ETF's fees to 0.07 percent from 0.2 percent in the process.

Whether or not investors will flock to the iShares Core S&P Total U.S. Stock Market ETF to save one basis point over VTI remains to be seen. Perhaps the transition will be made easier if the fund noticeably outperforms VTI.

Sector Funds Maybe this move is being saved for later, but iShares did not announce fee reductions for any of its sector funds. That is somewhat odd given that the fees on iShares sector ETFs are far higher than what Vanguard charges. The select sector SPDRs are even modestly cheaper than Vanguard's sector funds.

For example, the iShares Dow Jones U.S. Energy Sector Index Fund (IYE) charges 0.47 percent per year. That fund has almost $1.1 billion in AUM. The Energy Select Sector SPDR (XLE) charges 0.18 percent and has over $7.7 billion in AUM.

There are two ways of looking at this situation. iShares could be privately acknowledging it cannot compete with State Street (STT) and Vanguard on sector fund fees. Or iShares is saving some ammunition for later and could unveil a significant fee reduction on ETFs such as IYE at a later date. Only iShares knows the answer.

Not Cut Part II Aside from the creation of the core emerging markets ETF, iShares did not unveil any fee reductions for its suite of emerging markets funds. Excluding the VWO/EEM rivalry and a couple of other isolated examples, iShares is by far the dominant purveyor of emerging markets ETFs.

For countries that iShares does not have the first-to-market advantage, think Indonesia and Russia, the firm usually undercuts the existing fund on fee, forcing that ETF's sponsor to consider fee cuts of its own.

For ETFs tracking countries where iShares has the first mover advantage, the iShares MSCI Thailand Investable Market Index Fund (THD) and the iShares MSCI Chile Investable Market Index Fund (ECH) being two good examples, the firm is already so entrenched and its brand recognition so deep that fee reductions on these ETFs are not necessary.

Said another way, any ETF issuer can create a new Chile-specific fund, but the prospects for success are minimal given that ECH is viewed as THE Chile ETF.

Bottom line: The only country-specific iShares emerging markets ETFs that look like credible candidates for expense cuts are the funds tracking Indonesia, Poland and Russia because Van Eck's Market Vectors has three comparable funds that investors have embraced. Investors probably should not expect the fee-trimming craze to hit iShares emerging markets ETFs any time soon.

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