BOSTON & NEW YORK--(BUSINESS WIRE)--Fidelity Investments® and BlackRock, Inc. (NYSE: BLK) today shared an update on its strategic ETF alliance, expanded one year ago. The newest deliverable from the firms is the BlackRock® Diversified Income Portfolio, an ETF managed account1 designed to address the challenges and risks investors may face when looking for income in today’s marketplace. The companies also announced that over the past year, investors and advisors invested 86 percent more in the 65 iShares ETFs that can be purchased commission-free through Fidelity than in the prior year2, and that in the first five months the 10 low-cost Fidelity passive sector ETFs, sub-advised by BlackRock, attracted more than $500 million in assets3.
BlackRock Diversified Income Portfolio
The BlackRock Diversified Income Portfolio is an ETF managed account that will be available exclusively to all eligible retail investors through Fidelity’s managed accounts service beginning May 1. This professionally managed account is a multi-asset income solution composed primarily of ETFs, and uses a tactical, go-anywhere approach that seeks to provide exposure to attractive income opportunities across asset classes, sectors, and regions around the world while carefully balancing the trade-offs between risk and yield. Fidelity will offer the BlackRock Diversified Income Portfolio, with BlackRock Investment Management, LLC as the portfolio strategist and Fidelity’s Strategic Advisers, Inc. as the investment advisor4.
“Investors have significantly benefitted from this unprecedented partnership between industry leaders Fidelity and BlackRock,” said Kathleen A. Murphy, president of Personal Investing at Fidelity Investments. “The extremely strong investor and advisor demand for our innovative ETF products and the introduction of the BlackRock Diversified Income Portfolio are just two examples of the power of this partnership.”
Record Dollars Flow into Commission-Free iShares ETFs
Last March Fidelity and BlackRock expanded the number of iShares ETFs that can be purchased commission-free5 through Fidelity from 30 to 65. Over the last year, Fidelity customers increased their investments by nearly 90 percent into these 65 ETFs compared to the previous year, and compared to a flat growth rate in the U.S. ETF industry6. Also during this time, the number of Fidelity accounts holding iShares ETFs grew 16 percent.
“Last year we doubled down on our partnership with Fidelity and we are thrilled with the results," said Mark Wiedman, global head of iShares at BlackRock. “The outsized growth we've seen in our commission-free iShares ETFs, coupled with the increase in Fidelity accounts holding our funds, speaks volumes to how our growing partnership is resonating with the millions of investors who are turning to iShares ETFs for their long-term holdings.”
Fidelity’s customer-centric products and services were the basis of three recent industry accolades, including ETF.com’s Best Online Brokerage for ETF Investors, 2014 Harris Poll EquiTrend®’s Discount Brokerage Brand of the Year, and the distinction of being ranked highest in the J.D. Power 2014 U.S. Full Service Investor Satisfaction StudySM.
Strong Demand for Fidelity’s Low Cost Passive Sector ETFs
Last October, Fidelity expanded its sector investing platform and launched 10 passive sector ETFs, sub-advised by BlackRock, that offer the lowest expense ratio for sector ETFs in the industry7—just 0.12%.8 The 10 ETFs provide advisors and investors additional ways to diversify portfolios, generate alpha through asset allocation and to manage risk. Investors and advisors have invested more than $500 million into Fidelity’s sector ETFs, with Fidelity MSCI Health Care Index ETF (FHLC) gathering the most assets under management.
In support of Fidelity’s enhanced sector offerings, the firm launched a new online tool to allow investors to build, model and test their own personalized portfolios of sector-themed ETFs and mutual funds. The Sector Portfolio Builder tool is available to all investors at www.fidelity.com/spb.
Investor Trends in ETF Research and Education
With some of the industry’s broadest and deepest ETF research and educational content available to investors, more people are turning to Fidelity to meet their ETF investing needs. In the fourth quarter of 2013, Fidelity’s ETF Research Center realized9:
- An increase of 43 percent in visitors, compared to Q3 2013
- A 44 percent increase in ETF research reports viewed, compared to Q3 2013
Additionally, the top three search strategies customers used to find ETFs among the more than 1,300 available on Fidelity.com were Asset Class, Geography Objective and Equity/Commodity Sector Objective.
Fidelity’s online Learning Center has more than 50 ETF lessons divided into beginner, intermediate and advanced content. The three most popular ETF lessons in 2013 were all in the beginner level: “What Are ETFs?” (96% helpful rating), “Primer of ETF Valuation” (86% helpful rating) and “Benefits of ETFs” (97% helpful rating).
Fidelity also introduced a new ETF research center for financial advisors. The center features educational content on ETFs from Fidelity and BlackRock, and search/screening tools that allow advisors to search for ETFs by either pre-defined criteria (e.g. region, sector, asset class) or by their own customized criteria, and easily navigate to a list of screened ETFs within the desired category.
“The usage stats of our ETF resources shows that ETFs are appealing more and more to mainstream investors, who are smartly consuming foundational education in order to make more informed investing decisions,” said Murphy.
About Fidelity Investments
Fidelity Investments is one of
the world’s largest providers of financial services, with assets under
administration of $4.7 trillion, including managed assets of $2.0
trillion, as of March 31, 2014. Founded in 1946, the firm is a leading
provider of investment management, retirement planning, portfolio
guidance, brokerage, benefits outsourcing and many other financial
products and services to more than 20 million individuals and
institutions, as well as through 5,000 financial intermediary firms. For
more information about Fidelity Investments, visit www.fidelity.com.
About BlackRock
BlackRock is a leader in investment
management, risk management and advisory services for institutional and
retail clients worldwide. At March 31, 2014, BlackRock’s AUM was $4.401
trillion. BlackRock helps clients meet their goals and overcome
challenges with a range of products that include separate accounts,
mutual funds, iShares® (exchange-traded funds), and other pooled
investment vehicles. BlackRock also offers risk management, advisory and
enterprise investment system services to a broad base of institutional
investors through BlackRock Solutions®. Headquartered in New York City,
as of March 31, 2014, the firm had approximately 11,500 employees in
more than 30 countries and a major presence in key global markets,
including North and South America, Europe, Asia, Australia and the
Middle East and Africa. For additional information, please visit the
Company’s website at www.blackrock.com.
About iShares
iShares is a global product leader in exchange
traded funds with over 600 funds globally across equities, fixed income
and commodities, which trade on 20 exchanges worldwide. The iShares
Funds are bought and sold like common stocks on securities exchanges.
The iShares Funds are attractive to many individual and institutional
investors and financial intermediaries because of their relative low
cost and trading flexibility. Investors can purchase and sell shares
through any brokerage firm, financial advisor, or online broker, and
hold the funds in any type of brokerage account. The iShares customer
base consists of the institutional segment of pension plans and fund
managers, as well as the retail segment of financial advisors and high
net worth individuals.
Before investing in any mutual fund or exchange-traded product, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular, or, if available, a summary prospectus containing this information. Read it carefully.
ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.
Free commission offer applies to online purchases of 65 iShares ETFs in a Fidelity account with a minimum opening balance of $2,500. The sale of ETFs is subject to an activity assessment fee (of between $0.01 and $0.03 per $1,000 of principal) and, subject to a short-term trading fee by Fidelity if held less than 30 days.
For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive, long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Additional information about the sources, amounts, and terms of compensation is described in the ETF’s prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice.
Strategic Advisers, Inc. and BlackRock Investment Management, LLC are independent entities and are not legally affiliated. Strategic Advisers, Inc. is the investment manager for client accounts and implements trades for the accounts based on the model portfolio of investments it receives from BlackRock Investment Management, LLC. Strategic Advisers, Inc. may select investments for an account that differ from BlackRock Investment Management, LLC’s model.
BlackRock® Diversified Income Portfolio is a service offered through Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments company. This service provides discretionary money management for a fee.
Keep in mind, investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
Fidelity, Fidelity Investments, Fidelity Investments and the pyramid logo, and WealthCentral are registered service marks of FMR LLC.
BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.
The third party trademarks appearing herein are the property of their respective owners.
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Fidelity Investments Institutional Services Company, Inc.
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© 2014
BlackRock. All rights reserved.
1 The BlackRock Diversified Income Portfolio is composed of exchange-traded products (ETPs) — primarily exchange-traded funds (ETFs) — but may contain other investment vehicles, such as mutual funds.
2 Based on internal Fidelity business data about the 65 commission-free iShares ETFs, comparing total new assets during 3/12/2012 – 2/28/2013 vs. 3/12/2013 – 2/28/2014.
3 Based on internal Fidelity business data from 10/24/2013 through 2/28/2014.
4 Strategic Advisers, Inc. is the investment manager for client accounts and implements trades for the accounts based on the model portfolio of investments it receives from BlackRock Investment Management, LLC. Strategic Advisers, Inc. may select investments for an account that differ from BlackRock Investment Management LLC's model.
5 Free commission offer applies to online purchases of 65 iShares ETFs in a Fidelity account with a minimum opening balance of $2,500. The sale of ETFs is subject to an activity assessment fee (of between $0.01 and $0.03 per $1,000 of principal) and, subject to a short-term trading fee by Fidelity if held less than 30 days.
6 http://www.etf.com/sections/features/20846-2013-marks-new-etf-flows-recordbarely.html
7 Strategic Insight SimFund/FI Desktop, data as of 8/31/2013. Based on a comparison of total expense ratios for U.S. sector level ETFs with similar holdings and investment objectives (using the MSCI and S&P Global Industry Classification System — GICS®) within the universe of 298 ETFs Morningstar has classified as the Sector Stock asset class.
8 The percentage of fund assets used to pay for operating expenses and management fees, including 12b-1 fees, administrative fees, and all other asset-based costs incurred by the fund, except brokerage costs. Fund expenses are reflected in the fund's NAV. Sales charges are not included in the expense ratio.
9 Based on internal Fidelity business data as of 12/31/2013.
