Investment Product and Service Launches

Art by Jackson Epstein

Fidelity Adds Lower Expense Ratio Mutual Funds

Fidelity Investments has expanded its index fund offering with the launch of five new mutual funds.

As is the case with Fidelity’s 53 existing stock and bond index funds and 11 sector exchange-traded funds (ETFs), the new funds have lower expense ratios than their comparable funds at Vanguard. The five new funds are available to individual investors, third-party financial advisers (TPAs) and workplace retirement plans.

“Fidelity’s goal is to provide exceptional value, simplicity, and choice for our customers,” says Colby Penzone, senior vice president of Investment Product at Fidelity. “We saw an opportunity to further expand our robust index fund lineup and bring our expertise into these areas of the market. Our scale and diversification put Fidelity in a unique position to help clients reach their financial goals.” 

The new funds include: Fidelity Mid Cap Growth Index Fund; Fidelity Mid Cap Value Index Fund; Fidelity Small Cap Growth Index Fund; Fidelity Small Cap Value Index Fund; and Fidelity Municipal Bond Index Fund.

Vanguard Introduces Global Stock Fund

Vanguard has filed a preliminary registration with the U.S. Securities and Exchange Commission (SEC) for Vanguard International Core Stock Fund. The new actively managed fund will be managed by Wellington Management Company LLP (Wellington Management) and is expected to be available to investors in the fourth quarter of 2019.

Vanguard International Core Stock Fund will offer broad equity exposure to both developed and emerging non-U.S. markets, blending growth and value styles and diversifying across a range of sectors. The fund will seek to provide long-term capital appreciation and hold approximately 60 to 100 stocks, with no individual positions representing greater than 5% of the portfolio. It is expected to have moderate overweight or underweight allocations to sectors and regions relative to the MSCI ACWI ex USA Index.

Wellington Management is said to employ a multi-disciplinary approach that identifies potential high-return opportunities by leveraging the full breadth and depth of Wellington Management’s global resources, including: Global Industry Analyst research; positions held by Wellington Management’s investment boutique teams; investment ideas from Wellington Management’s quantitative research teams; macro-economic research; and environmental, social and governance (ESG) research emphasizing governance practices. 

The estimated expense ratios for Vanguard International Core Stock Fund will be 0.35% for Admiral Shares and 0.45% for Investor Shares, both considerably lower than the asset-weighted average expense ratio of 0.75% for the industry’s foreign large-blend fund category.