On Monday, Barclays Global Fund Advisers (BGFA), the manager behind the very popular iShares family of ETFs, disclosed that it's cutting the fees the firm levies on iShares MSCI Brazil, iShares MSCI S. Africa, iShares MSCI S. Korea, and iShares MSCI Taiwan. BGFA also changed the management fee schedule for its very large iShares MSCI Emerging Markets Fund. However, that change won't immediately yield cost savings, as the fee cut is contingent on further growth of that fund and its stablemate, iShares MSCI BRIC. We explain the changes in further detail below.

iShares MSCI Emerging Markets and iShares MSCI BRIC

As mentioned, BGFA isn't immediately cutting the 0.74% expense ratio that it levies on iShares MSCI Emerging Markets and iShares MSCI BRIC. Instead, the firm has added an additional 'breakpoint' to the fee schedule that dictates the management fee that's charged. Previously, BGFA charged 0.75% on each dollar of assets below $14 billion and 0.68% on each dollar exceeding $14 billion. (For purposes of the calculation, BGFA defines 'assets' as the sum of iShares MSCI Emerging Markets Fund's assets and iShares MSCI BRIC's assets.) Now, BGFA is charging 0.75% on each dollar below $14 billion, 0.68% between $14 billion and $28 billion, and 0.61% on each dollar above $28 billion. Thus, as the funds' asset grow and eventually surpass the $28 billion mark, the 0.61% fee breakpoint will take hold, bringing the total management fee down.

The breakpoint won't take immediate effect, though, because the emerging markets and BRIC funds' combined assets fall shy of the $28 billion threshold. As of Monday, according to iShares' website, those funds held a combined $26.5 billion in assets. In fact, investors aren't likely to see a single basis point in additional savings until the funds' combined assets approach $31 billion, which by our calculations is when the management fee would fall to 0.70%.

What kind of sacrifice is BGFA making in instituting the new breakpoint? Here's how the fees pile up under the old and new schedules: (cue the violins...)

In other words, when the funds' combined assets hit $50 million, BGFA stands to pull down $334.4 million in management fees under the new schedule, versus $349.8 million under the old schedule, a 4.4% difference. That's chump change, especially when you consider the relative profitability of each incremental dollar of assets that comes through the door (that's the beauty of positive operating leverage). Investors deserve breakpoints that start earlier, cut deeper, and extend farther across the asset range.

Vanguard Emerging Markets ETF, by the way, tracks the very same benchmark as iShares MSCI Emerging Markets, yet is roughly one-third the cost.

iShares MSCI Brazil, iShares MSCI S. Africa, iShares MSCI S. Korea, and iShares MSCI Taiwan

At least BGFA is cutting investors in these ETFs a break: The management fee is slated to fall 3 basis points at each of these funds, effectively immediately.

The circumstances are essentially identical to those surrounding iShares MSCI Emerging Markets--BGFA has added a breakpoint to the fee schedule (0.64% for each dollar of assets above $8 billion). The difference in this case is that the funds' combined assets--$15.6 billion as of Monday--exceed the $8 billion threshold, meaning that the new breakpoint will immediately take hold, lowering the fee.