An interesting article in Bloomberg about how business views differ from the largest providers of ETF- Blackrock and Vanguard. While Vanguard has relied on super-low commissions and price wars, Blackrock is trying to find ways to charge higher commissions for some products. So far they have done it well — the diagram shows that in the company’s revenues 48% comes from funds with a commission of 0.4% per year, while at Vanguard, which has relied on individuals, 92% of income comes from funds with an annual commission less than 0.2%. Higher commissions are willing to pay institutional and hedge funds, firstly, for niche ETFs and, secondly, for high liquidity, which allows them to trade large lots. We recently wrote that large investors are suspicious of “free” products and why. For now, Blackrock practice confirms this. But let’s see if the market will force them to reconsider their pricing policy.