WASHINGTON—Following Deutsche Bank AG’s (DB – Get Report) decision to cut the cost of its flagship high-yield ETF, some analysts warned Wednesday that exchange-traded fund price wars are far from over and predicted that no-fee ETFs could become a reality within several years.

Deutsche Bank cut the net expense ratio of its Xtrackers USD High Yield Corporate Bond ETF (HYLB) to 0.2% from 0.25% on Monday, the latest in a series of fee reductions for an industry that some analysts say may need to trim prices much further.

Alex Bryan, Morningstar’s director of passive strategies research, said fees will hit zero sooner rather than later.

“Providers are offering uber low-cost products and using them as loss leaders to get their foot in the door and offer more profitable products,” Bryan said.

Deutsche Bank’s move to slash fees follows the decision by investment manager State Street Corp. (SST – Get Report) earlier this month to lower expense ratios on 15 of its popular ETFs, including a reduction of its emerging markets fund to 0.11% from 0.59%, making it the cheapest ETF for emerging market stocks.

The pricing war has extended to more complex and historically expensive ETFs that use alternative index construction rules instead of weighting based on market capitalization. Goldman Sachs & Co. (GS – Get Report) introduced its ActiveBeta US Large CAP ETF (GSLC) with a cost of just nine basis points.

“Historically, the smart beta strategies were under a lot less pressure,” said Bryan. “But now we’re starting to see pressure there, too.”

“Goldman jumpstarted it when they launched their product,” he added. “The legacy products had been in the 20 to 40 basis point range.”

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