Fidelity Investments announced Friday it was reducing expense ratios for some target-date funds series for retirement accounts as well as individual and taxable offerings.
For the Freedom Index Funds institutional premium class, the net expense ratio has been cut to eight basis points from 10. This reduction applies to institutions that have at least $100 million in target-date assets.
For the Freedom Index Funds investor class, for retail clients, the expense ratio has been reduced to 14 basis points from 15.
Fidelity also said it was reducing expense ratios for its collective investment trust-based FIAM Index Target Date Strategies. Institutions with less than $100 million in target-date fund assets will receive a fee cut to 14 basis points from 15 points. Those with $100 million to $200 million in target-date fund assets will carry a new fee of 8 basis points, down from 10.
In addition, Fidelity will offer several rate reductions for plans with larger amounts of assets in FIAM Index Target Date Strategies: 7 basis points for assets in the $200 million to $1 billion range; 6 basis points for assets in the $1 billion to $2 billion range; and 5 basis points for assets of more than $2 billion. These are new categories. Previously, the expense ratios for $100 million or more in the FIAM Index Target Date Strategies was 10 basis points.
Fidelity took these actions "to make our products more competitive and to provide the most value," Eric Kaplan, head of target-date product, said in an interview.
Separately, Fidelity filed with the Securities and Exchange Commission a registration statement for a new target-date series, Fidelity Freedom Blend Funds, that combines actively managed and passively managed underlying investments.