Boston mutual fund-bigwig Fidelity Investments announced that it has launched new target date funds that will blend active and passive strategies.
The company also said it’s introducing a new, reduced fee schedule for the Fidelity Institutional Asset Management (FIAM) Blend Target Date Commingled Pools “to offer better value for retirement plan participants.”
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 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.
“We have offered target-date blend strategies in commingled pools for the past five years,” said Eric Kaplan, Fidelity’s head of Target-Date Product, said in a statement. “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. 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.
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.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
