Invesco is to take a chunk out of the management fee on its NYSE Arca-listed PowerShares Active US Real Estate ETF (PSR US), knocking it down from 0.80% to 0.35% as of 1 April 2018.

Invesco flattens fee on active US real estate ETF

Lorraine Wang, global head of ETF products & research at Invesco, commented, “Invesco continues to evaluate the cost-efficiency of its ETFs to offer investors the most effective, transparent access to leading investment solutions.”

The ETF selects investments from a universe of securities that are included in the FTSE NAREIT All Equity REITs Index at the time of purchase. Quantitative and statistical metrics are then employed to screen the universe for attractively valued securities and manage risk.

The fund primarily invests in equity real estate investment trusts (REITs) across several sectors. The ETF currently has its largest weightings in specialized REITs (35.3%), residential REITs (16.8%), retail REITs (15.3%) and Office REITs (11.9%).

Although the new fee will be less than half of the original, it will still be significantly higher than some of the fund’s passive competitors.

The Vanguard Real Estate ETF (VNQ US), for example, has a 0.12% expense ratio and currently houses $29.7 billion in assets under management (AUM). Not to be outdone, the Schwab US REIT ETF (SCHH US), with $3.9bn AUM, charges a TER of 0.07%.