ETF Managed Account Seeks Attractive Income Opportunities Worldwide Fidelity Customers Increase Investments into Commission-Free iShares ETFs by Nearly 90 percent
BOSTON and NEW YORK – 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 accounti 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 yearii, 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 assetsiii.
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 advisoriv.
"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-free 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 industry. 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 industry —just 0.12%.viii 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 realizedix:
- 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.
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.
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.
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