“Our passive sector ETFs seek to provide customers with a cost-effective option to help diversify portfolios and gain exposure to specific industries. With more than $2.2 billion in assets under management, the ETFs continue to generate significant interest among clients, especially within the investment advisor community.”
Available to individual investors and financial advisors, FREL is a passively-managed, market-cap weighted real estate ETF. Fidelity, who has been managing index funds for over 25 years, now offers 16 Fidelity index mutual funds and 12 passively managed Fidelity ETFs totaling $177 billion assets under management.
FREL, which will commence trading on the New York Stock Exchange today, February 5, 2015, at 9:30 a.m. Eastern Time, is competitively priced with a total expense ratio of 0.12 percent, matching Fidelity’s existing passive sector ETF lineup. The sector ETFs offer among the lowest expense ratios in the industry and are available commission freei to investors and advisors online through one of Fidelity’s brokerage platforms.
“Considered by many investors as the 11th sector, we believe there is strong client demand for diversified real estate investments in an ETF wrapper given there is currently $907 billion in listed real estate instruments in the U.S.1,”said Anthony Rochte, president of Fidelity SelectCo, the firm’s dedicated sector investing division. “Our passive sector ETFs seek to provide customers with a cost-effective option to help diversify portfolios and gain exposure to specific industries. With more than $2.2 billion in assets under management, the ETFs continue to generate significant interest among clients, especially within the investment advisor community.”
As part of its broader strategic relationship, Fidelity uses BlackRock as the sub-advisor for its 11 passive sector ETFs. MSCI continues to provide its global equity indexes.
Investors Offered Additional Choice for Real Estate Industry
Fidelity has more than 30 years of global sector investing experience and offers 44 actively managed sector mutual funds with $75 billion in assets, up nearly 21% from one year ago.2 This is the industry’s largest lineup of sector mutual funds. With the launch of Fidelity MSCI Real Estate Index ETF, individual investors and advisors can now obtain exposure to the industry through a variety of different active and passive products managed by Fidelity. The following chart provides the complete list of real estate funds:
|Fund||Total Net Expense Ratio3(as of 9/29/2014)|
|Fidelity MSCI Real Estate Index ETF||0.12%|
|Core Real Estate|
|Fidelity Real Estate Investment Portfolio (FRESX)||0.80%|
|Fidelity Spartan Real Estate Index Fund – Investor Class (FRXIX)||0.23%|
|Fidelity Spartan Real Estate Index Fund – Advantage Class (FSRVX)||0.09%|
|Specialized Real Estate|
|Fidelity Real Estate Income Fund (FRIFX)||0.83%|
|Fidelity International Real Estate Fund (FIREX)||1.14%|
|Fidelity Select Construction and Housing Portfolio (FSHOX)||0.81%|
|Fidelity Advisor (FA) Real Estate|
|FA Real Estate Fund – Institutional Class||0.89%|
|FA Real Estate Income Fund – Institutional Class||0.78%|
|FA International Real Estate Fund – Institutional Class||1.12%|
Extensive Sector Investing Education and Tools
Fidelity also continues to expand its extensive suite of in-depth sector research and market commentary for investors and advisors on dedicated micro sites on fidelity.com and advisor.fidelity.com. The newest investment insights include:
- Q1 2015 Sector Scorecard: The new report leverages proprietary research from across Fidelity and provides investors a snapshot of the relative performance potential of the 10 market sectors based on five key factors: relative strength, momentum, relative valuations, fundamentals and business cycle. The report reveals that technology stocks continue to appear best positioned among the 10 sectors.
- 2015 Annual Equity Sector Outlook: Fidelity’s sector portfolio managers provide their perspective on some of the best sector investing ideas in 2015.
- State of the Sector – Financials: Chris Lee, financials research sector leader and portfolio manager, provides his view of what lies ahead for companies in the financials sector, including how pent-up consumer demand may sustain the U.S. housing recovery and potentially benefit real estate services companies and banks.
Extensive Commission-Free ETF Offering Available to Fidelity Customers
The expanded passive sector ETF lineup complements Fidelity’s three actively managed fixed income ETFs launched in October 2014. In addition, Fidelity has provided its brokerage customers, both individual investors and advisors, access to thousands of ETFs for a number of years and has $195 billion in ETF assets under administration.4 Fidelity customers now have access to 85 commission-free ETFs. The company also has a dedicated ETF Center on Fidelity.com that provides education, research and an ETF Portfolio Builder to help investors integrate ETFs into their investment portfolio.
“Fidelity’s ETF strategy reflects the strength of our diversified business model – combining the power of our distribution and asset management organization – while maintaining a focus on customers’ ability to have access to choice, value and innovation,” stated Rochte.
About Fidelity Investments
Fidelity’s goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. With assets under administration of $5.1 trillion, including managed assets of $2.0 trillion as of December 31, 2014, we focus on meeting the unique needs of a diverse set of customers: helping 23 million people investing their own life savings, 20,000 businesses to manage their employee benefit programs, as well as providing 10,000 advisory firms with technology solutions to invest their own clients’ money. Privately held for nearly 70 years, Fidelity employs 41,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit www.fidelity.com.
iFree commission offer applies to online purchases of Fidelity ETFs and select iShares ETFs in a Fidelity brokerage account which may require a minimum opening balance of $2,500. The sale of ETFs is subject to an activity assessment fee (of between $0.01 to $0.03 per $1,000 of principal). iShares ETFs and Fidelity ETFs are subject to a short-term trading fee by Fidelity if held less than 30 days.
ETFs are subject to market fluctuation and the risks of their underlying investments. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.
Because of their narrow focus, sector funds tend to be more volatile than funds that diversify across many sectors and companies.
Changes in real estate values or economic downturns can have a significant negative effect on issuers in the real estate industry.
Fidelity, Fidelity Investments, Fidelity Investments and the pyramid logo, are registered service marks of FMR LLC.
The third party trademarks appearing herein are the property of their respective owners.
The funds or securities referred to herein are not sponsored, endorsed or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The prospectuses for each of the 10 Fidelity passive sector ETFs contains a more detailed description of the limited relationship MSCI has with Fidelity and any related funds.
Before investing in any mutual fund or exchange traded fund, you should consider its investment objective, risks, charges and expenses.Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.
Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem Street, Smithfield, RI 02917
Fidelity Investments Institutional Services Company, Inc.,
500 Salem Street, Smithfield, RI 02917
Clearing, custody or other brokerage services may be provided by National Financial Services LLC, or Fidelity Brokerage Services LLC. Members NYSE,SIPC. 200 Seaport Blvd, Boston, MA 02210.
Fidelity Institutional Wealth Services provides brokerage products and services and is a division of Fidelity Brokerage Services LLC. National Financial is a division of National Financial Services LLC through which clearing, custody and other brokerage services may be provided. Both members NYSE, SIPC.
© 2015 FMR LLC. All rights reserved.
1 Source: REIT.com (Industry Real Estate Size is based on the FTSE NAREIT All REITs), Investment Company Institute, Strategic Insight Simfund & Morningstar; Data as of 12/2014.
2 As of December 31, 2014
3 Expense Ratio is the total annual fund operating expense ratio from the fund’s most recent prospectus
4 As of December 31, 2014