Fidelity Investments® Launches Target-Date Blend Funds; Lowers Pricing on Target-Date Commingled Pools
BOSTON--(BUSINESS WIRE)--Sep 6, 2018--Fidelity Investments ®, one of the largest and most diversified global financial services firms with more than $7 trillion in total client assets and more than $2.6 trillion in managed assets, today announced the launch of 13 Fidelity Freedom Blend Funds, with retail and advisor share classes.
The new Freedom Blend target-date funds invest assets in a combination of underlying index funds and active funds while using the same glide path, investment process, and resources as the existing Fidelity target-date funds.
“The Fidelity Freedom Blend Funds, just like the Fidelity and Fidelity Advisor Freedom Funds and Fidelity Freedom Index Funds, include a diversified mix of investments designed to help grow retirement savings during investors’ earning years, support an individual’s income needs through their retirement years, and provide protection from market volatility throughout an investor’s lifetime,” said Andrew Dierdorf, portfolio manager, Fidelity Investments.
The Fidelity Freedom Blend funds will be co-managed by Andrew Dierdorf and Brett Sumsion, who are supported by Fidelity’s global investment and research capabilities. The pair also co-manage other asset allocation funds, including the existing Fidelity Freedom Funds, for which they were nominated for “2017 Morningstar Fund Managers of the Year 1. ”
“We have offered target-date blend strategies in commingled pools for the past five years. We are introducing the Freedom Blend funds to meet the growing demand from clients who have been asking for a target-date strategy that incorporates a balanced mix of active and passive investment capabilities in a single mutual fund,” said Eric Kaplan, head of Target-Date Product. “These blend funds offer individual investors, financial advisors, plan sponsors and retirement plan participants another outstanding choice to help reach retirement savings goals.”
Each Freedom Blend Fund will launch with nine share classes offering different expense levels. For example, expenses for the retail and I share classes will range from 0.46%–0.54% depending on the target year, while the K6 and Z6 share classes will range from 0.26%–0.34% 2.
The mix of active and low-cost passive investments will vary based on the target year with passive investments generally expected to range between 20% and 60% of each fund portfolio.
Fidelity Freedom Blend 2020 through 2060 Funds seek high total return until their target retirement date. Thereafter, each fund’s objective will be to seek high current income and, as a secondary objective, capital appreciation. Fidelity Freedom Blend Income and 2005 through 2015 Funds seek high current income and, as a secondary objective, capital appreciation.
Reduced Fee Schedule for FIAM Blend Target Date Commingled Pools
Fidelity Investments is also introducing a new, reduced fee schedule for the Fidelity Institutional Asset Management (FIAM) Blend Target Date Commingled Pools to offer even better value for retirement plan participants. As noted in the chart below, current FIAM Blend Target Date customers are now eligible for either a lower price in an existing share class or a less expensive share class option, depending on their current FIAM target date assets. FIAM Blend Target Date Commingled Pools are available for institutional investors, including retirement plans. The new pricing is effective September 1, 2018.
About Fidelity Investments
Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $7.2 trillion, including managed assets of $2.6 trillion as of July 31, 2018, we focus on meeting the unique needs of a diverse set of customers: helping more than 27 million people invest their own life savings, 23,000 businesses manage employee benefit programs, as well as providing more than 12,500 financial advisory firms with investment and technology solutions to invest their own clients’ money. Privately held for 70 years, Fidelity employs more than 40,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.
Investment performance of the Target Date Blend products depends on the performance of the underlying investment options and on the proportion of the assets invested in each underlying investment option. The investment risk of each Target Date Blend strategy changes over time as its asset allocation changes. These risks are subject to the asset allocation decisions of the portfolio manager. Pursuant to the portfolio manager’s ability to use an active asset allocation strategy, investors may be subject to a different risk profile compared to the portfolio’s neutral asset allocation strategy shown in its glide path. The portfolios are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, commodity-linked and foreign securities. The portfolios are subject to the risks associated with investing in a passively managed underlying investment options in which the passively managed underlying investment option’s performance could be lower than an actively managed product that shifts its portfolio assets to take advantage of market opportunities or lessen the impact of a market decline or a decline in the value of one or more issuers. Fixed income investments entail issuer default and credit risk, inflation risk, and interest rate risk (as interest rates rise, bond prices usually fall and vice versa). This effect is usually more pronounced for longer-term securities. Leverage can increase market exposure, magnify investment risks, and cause losses to be realized more quickly. No target date strategy is considered a complete retirement program and there is no guarantee any single offering will provide sufficient retirement income at or through retirement. Principal invested is not guaranteed at any time, including at or after the portfolio’s target dates.
The FIAM Target Date commingled pools are commingled pools of the FIAM Group Trust for Employee Benefit Plans, and are managed by Fidelity Institutional Asset Management Trust Company, a trust company organized under the laws of the State of New Hampshire. The FIAM Target Date commingled pools are not mutual funds.
The FIAM Target Date Commingled Pools are not mutual funds. FIAM products and services may be presented by Fidelity Investments Institutional Services Company, Inc., or Fidelity Brokerage Services, LLC, Member NYSE, SIPC, each a non-exclusive financial intermediary that is affiliated with FIAM, or Fidelity Investments Canada ULC and FIL Limited, all of which are compensated for such services.
© 2018 Morningstar, Inc. All rights reserved. The information contained herein;(1) is proprietary to Morningstar and/or its affiliates; (2) may not be copied or distributed; (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Fidelity does not review the Morningstar data and, for mutual fund performance information you should check the fund’s current prospectus for the most up-to-date information concerning applicable loads, fees and expenses.
Before investing, consider the investment objectives, risks, charges, and expenses of the fund and its investment options. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
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Fidelity Investments Institutional Services Company, Inc., 500 Salem Street, Smithfield, RI 02917
National Financial Services LLC, Member NYSE, SIPC, 200 Seaport Boulevard, Boston, MA 02110
© 2018 FMR LLC. All rights reserved.
1 Andrew Dierdorf and Brett Sumsion were nominated as “2017 Morningstar Fund Managers of the Year” in the Allocation/Alternatives category for the Fidelity Freedom Funds. The Freedom Blend Fund is a different fund. Different share classes have different expense and performance characteristics as well as eligibility requirements. 2 Mutual Fund expense ratios shown are as of 8/31/18 and represent the expense ratio range across the Freedom Blend lineup for the specific share classes shown. Expense ratio will vary by target date and share class. Please see the fund prospectus for more details.
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SOURCE: Fidelity Investments
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PUB: 09/06/2018 08:00 AM/DISC: 09/06/2018 08:01 AM