Fidelity® Cuts Expenses on Freedom Index Funds and FIAM Index Target
Date Commingled Pools
BOSTON–(BUSINESS WIRE)–Fidelity
Investments, one of the largest and most diversified global
financial services firms with $7.6 trillion in total client assets and
$2.7 trillion in managed assets, continues to deliver even greater value
for tens of millions of investors. Today, the company announced a 14%
price reduction on the entry-level share classes of the Fidelity Freedom
Index Funds and Fidelity Institutional Asset Management (FIAM) Index
Target Date Commingled Pools. Entry-level share classes are those with
the lowest minimum investment for a fund or commingled pool.
With this action, 21 of the 22 Fidelity Freedom Index Funds will have
total net expenses lower than comparable Vanguard index target date funds1.
The expense reductions are expected to save current Fidelity Freedom
Index Fund shareholders approximately $3.2 million annually (calculated
based on Fidelity Freedom Index Fund assets as of 4/30/19.)
“At Fidelity, we have a long history of providing investors with a wide
array of high- quality products at a great value to help them meet their
investment goals,” said Eric Kaplan, head of Target-Date Product. “These
target date index fund expense reductions build on that legacy,
providing our tens of millions of customers — individual investors,
workplace retirement plan sponsors and participants, and financial
advisors — an even more compelling value proposition.”
The following prices are effective as of June 1, 2019:
Fidelity Freedom Index Funds – Investor Classes expenses were reduced
to 0.12% (or just 12 cents for every $1,000 invested) from 0.14%. Pricing
for Institutional Premium Class remains at an industry leading 0.08%.
Investors and workplace retirement plan sponsors do not need to take any
action to receive the new pricing. The savings will be automatically
applied to eligible accounts.
| Fidelity Freedom Index Funds | Share Class | |||
| Investor | Institutional Premium | |||
| New Net Expense | 0.12% | 0.08% | ||
| Previous Net Expense | 0.14% | 0.08% | ||
FIAM Index Target Date Commingled Pools investors in the entry-level
share class are now eligible for a lower price: 0.12%, down from 0.14%. Pricing
of the other FIAM Index Target Date Commingled Pool share classes remain
unchanged. Fidelity’s goal is to have affected accounts adjusted to the
lower fee schedule by the end of the year, following a re-contracting
period. The new fee schedule is shown below:
|
FIAM Index Target Date
Commingled Pools |
$0-$100M | $100M-200M |
$200M-
$1,000M |
$1,000M-
$2,000M |
$2,000M+ | |||||
| New Net Expense | 0.12% | 0.08% | 0.07% | 0.06% | 0.05% | |||||
| Previous Net Expense | 0.14% | 0.08% | 0.07% | 0.06% | 0.05% | |||||
Note: The dollar ranges of the share classes shown above reflect the
total investment of all participants in a workplace retirement plan in
the FIAM Index Target Date Commingled Pool
About Fidelity Freedom Index Funds
The Fidelity Freedom
Index Funds and FIAM Index Target Date Commingled Pools are co- managed
by Finola McGuire Foley, Andrew Dierdorf and Brett Sumsion, who are
supported by Fidelity’s global investment and research teams. Fidelity
is dedicated to remaining at the forefront of target date design and
innovation, reflecting its long-term commitment to serving millions of
investors saving for their retirement.
“Our investment process is focused on helping investors solve the
challenge of growing their retirement savings during their earning
years, supporting their income needs through their retirement years, and
balancing market volatility throughout their lifetimes,” said Finola
McGuire Foley, portfolio manager, Fidelity Investments.
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 $7.6 trillion,
including managed assets of $2.7 trillion as of April 30, 2019, we focus
on meeting the unique needs of a diverse set of customers: helping more
than 30 million people invest their own life savings, 22,000 businesses
manage employee benefit programs, as well as providing more than 13,500
financial advisory firms with investment and technology solutions to
invest their own clients’ money. Privately held for more than 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.
Before investing, consider the funds’ investment objectives, risks,
charges, and expenses. Contact Fidelity for a prospectus or, if
available, a summary prospectus containing this information. Read it
carefully.
Past performance is no guarantee of future results.
Diversification and asset allocation does not ensure a profit or
guarantee against loss.
The investment risk of each Target Date strategy changes over time as
its asset allocation changes. These risks are subject to the asset
allocation decisions of the portfolio manager. Except for the index
portfolios, 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. 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
portfolios’ target dates.
Target Date Funds are an asset mix of stocks, bonds and other
investments that automatically becomes more conservative as the fund
approaches its target retirement date and beyond. Principal invested is
not guaranteed.
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.
Fidelity Brokerage Services LLC, Member NYSE, SIPC 900 Salem Street,
Smithfield, RI 02917
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
888634.1.0
© 2019 FMR LLC. All rights reserved.
1 The Fidelity Freedom Index Income Fund, Investor Share
Class, has the same expenses as its Vanguard counterpart: 12
basis points. Sources: Fidelity prospectus, 5/30/2019, Vanguard
prospectus, 1/28/2019.
Contacts
Corporate Communications
(617) 563-5800
[email protected]
Adam Banker
(617) 563-7940
[email protected]
