(Business Wire) -- Fidelity 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 funds.
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% 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 remains 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
