Fidelity and BlackRock form ETF alliance

Announcement

Fidelity Investments and BlackRock have formed a long-term strategic alliance that provides collaboration across Fidelity’s distribution and asset management organisations with BlackRock and its ETF provider, iShares, to deliver value to investors across a range of ETF initiatives.

The partnership aims to give Fidelity customers increased and improved access to a broad selection of passive ETF solutions provided by iShares.

“Through this groundbreaking alliance between two financial services leaders, we will leverage our complementary strengths to deliver leading ETF products and research that are unmatched to more than 10 million Fidelity customers,” says Kathleen A Murphy (pictured), president of personal investing at Fidelity Investments.

As part of the manufacturing and distribution partnership with 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 growing 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.

“We are thrilled to be joining with Fidelity to create an ETF manufacturing and distribution powerhouse,” says Mark Wiedman, global head of iShares at BlackRock. “This long-term partnership will enable millions of investors to maximize the value of ETF investing.”

Both companies will support the alliance with personnel focused on successfully delivering iShares ETFs to Fidelity customers through their respective retail and advisor networks.

Fidelity is committed to continually enhancing both its ETF commission-free line-up and providing investors with leading ETF research and tools to help them make informed investment decisions. 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 specialised equity, fixed income and commodities.

In addition, customers and non-customers can access ETF research and analysis tools on Fidelity’s ETF Research Center, which includes an ETF screener with more than 100 screening criteria, a colour-coded ETF Market Tracker to discover what ETFs are moving in the market, and independent experts’ timely commentary, investing ideas and pre-defined strategies. In the past year, customer activity on Fidelity’s ETF Research Center increased 28 per cent.

Customers of registered investment advisors (RIAs) on the Fidelity Institutional Wealth Services platform will also benefit from the expanded line-up of 65 commission-free ETFs.

“RIAs are increasingly using ETFs in their investing strategies,” says Michael R Durbin, president of Fidelity Institutional Wealth Services, Fidelity’s RIA custody unit. “We look forward to building a strong partnership with BlackRock to give RIAs on our platform new research tools and access to commission-free trading to help them more easily integrate ETFs in their clients’ portfolios.”

As part of this 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.

Portfolio Advisory Services currently offers professional money management and access to proprietary research through model portfolios of mutual funds and personalised portfolios using mutual funds, ETFs, and separate accounts. Customer investments have increased in Fidelity managed accounts products by 73 per cent in the past three years. Fidelity and BlackRock will jointly focus on providing ETF-based solutions on an ongoing basis as part of this partnership.

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