BlackRock is offering low-cost savings plans that use exchange traded funds.

BlackRock is teaming up with neobroker Bux to offer low-cost ETF savings plans in Europe. The savings plan, which will cost just €1 per month on the Bux platform, will allow investors to build portfolios of up to 10 BlackRock iShares ETFs, with a €1 commission fee for portfolio trades. (FT)

The minimum investment is set at €10 per month, aimed at appealing to younger savers. The Bux ETF savings plan will be launched in eight countries on January 31st. The move reflects the growing price war in ETF fees and shows how it’s spreading into savings plans and fund trading costs.

The plan is expected to attract 10 million new ETF investors in Europe over the next five years, creating a potential pool of assets worth €500 billion by 2026. The plan is aimed at younger or less confident investors who feel overwhelmed by the financial market.

BlackRock – Bux

BlackRock’s partnership with Bux will create an efficient way for investors to invest in global markets in a simple and cost-effective manner. The use of ETF investment plans is rapidly spreading across Europe, driven by large institutional players.

However, regulators believe that encouraging retail investors to use ETFs instead of active mutual funds could lead to better returns for consumers.

The absence of incentives for advisers to recommend ETFs is seen as one of the reasons for slow adoption among European retail investors.

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