Fidelity® and BlackRock® Announce Groundbreaking ETF Strategic Alliance
-Partnership Leverages Complementary Strengths to Provide Greater Value to Investors
-Fidelity Customers Will Benefit From Increased Access to Products and Enhanced Tools and Support for iShares ETFs
BOSTON and NEW YORK – Fidelity Investments® and BlackRock, Inc. (NYSE: BLK) announced today a long-term strategic alliance that provides extensive collaboration across Fidelity’s distribution and asset management organizations with BlackRock and its leading ETF provider, iShares, to deliver significant value to investors across a range of ETF initiatives. This partnership will give millions of Fidelity customers increased and improved access to a broad selection of passive ETF solutions provided by iShares, the world’s largest and most diverse ETF manufacturer1.
“Through this groundbreaking alliance between two financial services leaders, we will leverage our complementary strengths to deliver leading ETF products and research that are unmatched to more than 10 million Fidelity customers,” said Kathleen A. Murphy, president of Personal Investing at Fidelity Investments.
As part of this unique manufacturing and distribution partnership with iShares, Fidelity will more than double its current successful online commission-free ETF offerings and will create new ETF portfolio strategies using iShares as components within its managed account offering (Portfolio Advisory Services). In addition, as part of Fidelity’s growing sector-based business strategy, the company has established a strategic relationship with BlackRock whereby the firm will help support Fidelity’s future passive sector investment management efforts.
“We are thrilled to be joining with Fidelity to create an ETF manufacturing and distribution powerhouse,” said Mark Wiedman, global head of iShares at BlackRock. “This long-term partnership will enable millions of investors to maximize the value of ETF investing.”
Both companies will support this strategic alliance with personnel focused on successfully delivering iShares ETFs to Fidelity customers through their respective retail and advisor networks.
Commission-Free iShares for Individual Investors Offer Expanded
Fidelity is committed to continually enhancing both its ETF commission-free lineup and providing investors with leading ETF research and tools to help them make informed investment decisions. Fidelity is increasing the number of iShares® ETFs that can be traded commission-free on Fidelity.com from 30 to 65. The new list includes all 10 iShares Core ETFs as well as a diverse selection of international, domestic, and specialized equity; fixed income; and commodities. To see the full list of 65 commission-free ETFs available and the conditions that apply, visit: Fidelity.com/etfvalue. Customers can also access more than 1,100 other ETFs on Fidelity.com for a commission of only $7.95 per trade.
In addition, customers and non-customers can access industry-leading ETF research and analysis tools on Fidelity’s ETF Research Center, which includes an ETF screener with more than 100 screening criteria, a color-coded ETF Market Tracker to easily discover what ETFs are moving in the market, and independent experts’ timely commentary, investing ideas and pre-defined strategies. In the past year, customer activity on Fidelity’s ETF Research Center increased 28 percent.2
Alliance Extends to Fidelity Institutional Wealth Services
Customers of registered investment advisors (RIAs) on the Fidelity Institutional Wealth Services platform will also benefit from the expanded line-up of 65 commission-free ETFs. “RIAs are increasingly using ETFs in their investing strategies,” said Michael R. Durbin, president of Fidelity Institutional Wealth Services, Fidelity’s RIA custody unit. “We look forward to building a strong partnership with BlackRock to give RIAs on our platform new research tools and access to commission-free trading to help them more easily integrate ETFs in their clients’ portfolios.”
Managed Account Services Will Feature ETF Portfolio Strategies using iShares
As part of this partnership, Fidelity will also expand its managed account offerings by making available to customers new ETF managed portfolios using iShares as components within Portfolio Advisory Services. The ETF managed portfolios will complement Fidelity’s existing mutual fund and unified managed account offerings.
Portfolio Advisory Services currently offers professional money management and access to proprietary research through model portfolios of mutual funds and personalized portfolios using mutual funds, ETFs, and separate accounts. Customer investments have increased in Fidelity managed accounts products by 73 percent in the past 3 years3. Fidelity and BlackRock will jointly focus on providing innovative ETF-based solutions on an ongoing basis as part of this partnership.
BlackRock to Support Fidelity’s Expanding Sector Investment Management Efforts
Fidelity has been a pioneer in sector investing for 30 years and currently has one of the industry’s largest lineups of actively managed sector funds with assets of more than $47 billion4. While actively managed sector strategies will continue to be a core focus, Fidelity intends to deploy passive sector capabilities as part of its expanding sector-based strategy, and as part of those efforts, Fidelity will work with BlackRock.
Fidelity will continue to develop its active and smart beta investment management capabilities and these efforts will complement the expanded ETF alliance with BlackRock and iShares, further reinforcing Fidelity’s commitment to providing customers with the breadth and depth of investment products and services they need to meet their distinct financial goals.
Growth in ETF Investing
According to BlackRock research, the size of the global exchanged traded products industry has now surpassed $2 trillion5, and Fidelity research shows that ETF investing is poised to increase in 2013. In Sept. 2012, Fidelity completed a survey of active investors (those making 36 or more trades per year) and found they plan to allocate 10 percent more of their assets to ETFs within the next six months6.
About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $4.0 trillion, including managed assets of $1.7 trillion, as of January 31, 2013. 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.
BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At December 31, 2012, BlackRock’s AUM was $3.792 trillion. BlackRock offers products that span the risk spectrum to meet clients’ needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including 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 December 31, 2012, the firm has approximately 10,500 employees in 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.
iShares is the 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, tax efficiency 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.
1) “The iShares Difference” report, Oct. 2012: AUM and number of ETFs globally as of 6/30/2012.
2) Measurement of unique page views on Fidelity’s ETF Center based on internal business data between Dec. 31, 2011 and Dec. 31, 2012.
3) Assets under management for PAS has grown 73% since 2009. Forty-seven percent is attributed to net new client assets, and 26 percent attributed to market appreciation.
4) Fidelity internal data as of Jan. 31, 2013.
5) BlackRock ETP Landscape Report, Feb. 2013.
6) Fidelity’s “Top Traders” study was conducted July 25 to September 9, 2012 and included 165 Fidelity customers who had traded 36 or more times in the past 12 months.
Before investing, consider the fund’s investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus, or if available, a summary prospectus containing this information. Read it carefully.
ETFs may trade at a discount to their NAV and are subject to the market fluctuations of their underlying investments. ETFs are subject to management fees and other expenses.
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.
Effective July 31, 2013 any eligible iShares ETFs purchased commission-free must be held for a minimum of 30 calendar days or a short-term trading fee will apply.
Fidelity Portfolio Advisory Service® is a service of Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments company. Fidelity Private Portfolio Service® may be offered through the following Fidelity Investments companies: Strategic Advisers, Inc., Fidelity Personal Trust Company, FSB (“FPT”), a federal savings bank, or Fidelity Management Trust Company (“FMTC”). Non-deposit investment products and trust services offered through FPT and FMTC and their affiliates are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency, are not obligations of any bank, and are subject to risk, including possible loss of principal. These services provide 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.
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BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.
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