As part of the partnership with BlackRock’s ETF provider iShares, Fidelity will more than double its current 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 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.
“Fidelity will continue to develop its active and sector-based strategies, and will partner with BlackRock on passive strategies,” Kathleen A. Murphy, president of Personal Investing at Fidelity Investments, told PLANADVISER.
Murphy said BlackRock and Fidelity entered a partnership three years ago to offer commission-free iShares, and have expanded the number offered, but the firms recently decided expand that effort. So in addition to providing more iShares, Fidelity is partnering with BlackRock to provide more ETF solutions overall.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.
Ram Subramaniam, head of Fidelity’s Brokerage and Cash Management business, pointed out to PLANADVISER that the 65 ETFS are a great value; the Core ETFs have an expense ratio of 12.5 bps, with an expense ratio of 34 bps for the others. This compares to an ETF industry average of 61 bps, he noted.
In addition, high liquidity for ETFs is important to investors, and “ours are the most widely traded and liquid,” Subramaniam said.
To see the full list of 65 commission-free ETFs available and the conditions that apply, visit www.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.
According to the announcement, customers of registered investment advisers (RIAs) on the Fidelity Institutional Wealth Services platform will also benefit from the expanded line-up of 65 commission-free ETFs. As part of the 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.“We’re excited about this deeper partnership because it is really unmatched in the industry, and combining each firm’s strengths will add value to investors,” Murphy said.