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Bond Fund Shareholders to Benefit from Newly Lowered Expenses; New Investment Insights White Paper Helps Investors Learn About Role of Fixed-Income in a Diversified Portfolio
BOSTON, June 1, 2005 - More than 30 years after launching its first investment-grade bond fund, Fidelity Investments today announced new fixed-income pricing and education initiatives for investors and advisors. The launch marks 10 years of continuous enhancements to Fidelity's fixed-income mutual funds:
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Performance: Ten years ago, Fidelity instituted an innovative investment process for
managing its bond funds that had proven successful on its institutional products. The
result has been consistent and strong returns for the firm's bond fund shareholders. In
aggregate, Fidelity's investment-grade bond mutual funds have beaten 77 percent, 84
percent, and 86 percent of their peers on an aggregate, asset-weighted basis over the
one-, five-, and 10-year periods ending April 30, 2005, according to Lipper, Inc. Funds
are ranked within a universe of funds with similar investment objectives. Rankings1 are
based on total return and include the reinvestment of dividends and capital gains but
exclude the effect for the fund's sales load, if applicable. Past performance is no
guarantee of future results. Lipper Inc. is a nationally recognized organization that
ranks the performance of mutual funds.
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Products: Fidelity has developed a comprehensive taxable bond lineup, including
popular options such as Inflation-Protected (TIPs) and Ultra-Short bond funds as well as
more traditional investment-grade, Ginnie Mae and government funds. Although
bonds generally present less short-term risk and volatility than stocks, bonds do contain interest rate risk (as interest rates rise, bond
prices usually fall and vice versa) and the risk of default, or the risk that an issuer will be
unable to make income or principal payments. Additionally, bonds and short-term
investments entail greater inflation risk, or the risk that the return of an investment will
not keep up with increases in the prices of goods and services, than stocks.
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Asset Growth: As a sign of the funds' success, Fidelity's investment-grade bond fund
assets under management have grown from $29.5 billion on April 30, 2000, to $66.2
billion as of April 30, 2005. Overall, Fidelity's Fixed-Income Division managed $394.4
billion in total investment-grade bond and money market assets as of April 30, 2005.
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To celebrate this decade of success in its fixed-income mutual fund offerings, the
company is lowering expenses on its Fidelity, Advisor and VIP taxable investment
grade bond funds, effective June 1, 2005.
"We've done a tremendous amount of work over the past decade making our
bond funds more attractive to long-term investors, and the results are extremely
compelling," said David L. Murphy, senior vice president and head of Fixed Income.
"This has been an important initiative as we've long believed that fixed-income is a
critical component of a well diversified investment portfolio. We believe that reducing
fees will now make us even more visible to investors and advisors, and will make an
already successful bond fund product line even better."
Direct-Sold Bond Fund Expenses Lowered
Effective June 1, Fidelity's 12 taxable, investment-grade bond funds available
directly to investors will be offered with expense ratios of 0.45 percent, representing
reductions of up to 31 percent. Expenses will be fixed at this level contractually,
meaning that expenses cannot be raised without a vote of the funds' Board of Trustees.
These funds previously had expenses that ranged from 0.50 percent to 0.65 percent.
"We've been building strong momentum in our fixed-income products as we've
been engaged in a multi-year plan to deliver the most competitive offerings in the
marketplace to our investors," said Jeffrey R. Carney, president, Fidelity Personal
Investments. "In serving our millions of customers, we've observed that all too often
they are underallocated in fixed income and do not fully appreciate how fixed-income
investments can help them achieve their long-term financial goals.
"This 45 basis point pricing places our retail bond fund line-up among the
lowest-cost such product lines in the industry. But most importantly, our customers
continue to gain access to easier, more efficient and higher-quality means to reach their
financial goals than ever before."
Advisor Funds, VIP Portfolio Expenses Also Lowered
Additionally, Fidelity also has reduced by 10 basis points, or 0.10 percent, the
management fees for its entire product line of eight Advisor funds and one Variable
Insurance Product (VIP) taxable investment-grade bond portfolio.
Fidelity Investments Institutional Services Company (FIIS) provides Advisor
funds and VIP portfolio to financial institutions, including banks, insurance companies
and broker-dealers. This move has reduced the overall expenses of these funds by
varying amounts of up to 17 basis points, depending on the level of the existing expense
cap on each fund.
"We want more advisors to become aware of our expanded fixed-income lineup
and how they can use these competitive funds in building diversified portfolios,"
said Martha B. Willis, executive vice president of marketing for Fidelity Investments
Institutional Services Company. "We believe there is a need for fixed-income products
in all advisors' portfolio allocations. The historically consistent performance of our
expanded bond fund product line and the new lower expenses of many of them
underscore our commitment to helping our clients achieve effective diversification in
the investment portfolios they manage. In addition, in order to increase awareness of
the importance of fixed income, FIIS has held several summit meetings for both
individual advisors and our institutional clients."
Latest in Series of Customer-Friendly Moves
The fee reductions across Fidelity's taxable investment-grade bond funds also
will benefit investors in the Fidelity and Advisor Freedom Funds and the Fidelity and
Advisor 529 college savings plans that invest in those funds. This is in addition to the
recent elimination of the eight basis point management fee on the Fidelity and Advisor
Freedom Funds.
The fee reductions are the latest in a series of efforts by Fidelity to provide
investors with the highest quality financial products and services at very competitive
prices. Over the past two years, the company has rewritten the contracts of five
diversified domestic equity index funds to contractually bind the funds to total
expenses of 10 basis points each; transformed the trading of individual bonds with
disclosed and simplified retail fixed-income concessions; reduced the cost of retail online
bond concessions; reduced the per contract charge on options trades for all trading
tiers to $0.75; made third-party independent research, as well as access to industryleading
analyst recommendations and performance data, available to customers on
Fidelity.com at no extra charge; eliminated the $50 annual brokerage fee for new and
existing IRA customers; and eliminated front-end sales charges on dozens of mutual
funds making Fidelity's entire product line of funds sold directly to investors load free,
among other initiatives.
New Fixed-Income Investment Insights White Paper Completed
Fidelity also has released an Investment Insights white paper titled, "The Case
for Investing in Fixed Income," now available to investors at www.fidelity.com and to
advisors at http://advisor.fidelity.com. The paper was written to help demystify the
often complex fixed-income markets, while highlighting the potential benefits that
fixed-income can deliver to an investor's portfolio during all market cycles.
The document discusses how fixed-income investments can help reduce portfolio
risk and increase the potential earning power of an investor's liquidity reserves,
examines the futility of trying to time the bond market's ups and downs, and lays out
the reasons why fixed-income investments should be held across economic cycles.
"We recognized that fixed-income investing is often difficult to understand for
individual investors," said Carney. "So we set out to look at the myths, misconceptions
and realities around the fixed-income markets in a logical, sensible way. Most
importantly, we wanted to provide Fidelity clients with a guide that will help them
with fixed-income diversification throughout their investment lifetimes. We've also
found that these Investment Insights are popular with our advisors as well to help them
educate their clients."
About Fidelity Investments
Fidelity Investments is one of the world's largest providers of financial services,
with custodied assets of $2.1 trillion, including managed assets of $1.1 trillion as of
April 30, 2005. Fidelity offers investment management, retirement planning, brokerage,
and human resources and benefits outsourcing services to more than 19 million
individuals and institutions as well as through 5,500 financial intermediary firms. The
firm is the largest mutual fund company in the United States, the No. 1 provider of
workplace retirement savings plans, one of the largest mutual fund supermarkets and a
leading online brokerage firm. For more information about Fidelity Investments, visit
www.fidelity.com.
About Fidelity Investments Institutional Services
Fidelity Investments Institutional Services Company provides investment
management services through investment professionals at financial institutions
nationwide, including wirehouses, regional and independent broker/dealers, banks,
trust companies and insurance companies.
The company offers Fidelity Advisor Funds®, Variable Insurance Product (VIP)
Portfolios, systematic investment plans, institutional money market funds and a
comprehensive line of retirement products and services. Fidelity Investments
Institutional Services Company's total assets under management were more than $192
billion as of March 31, 2005. For more information, advisors can visit
http://advisor.fidelity.com.
# # #
1Please see below for important additional ranking data regarding Fidelity's investment-grade bond funds.
In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities.
Please carefully consider the fund's investment objectives, risks, charges and expenses before investing. For this and other information, call or write to Fidelity or visit Fidelity.com for a free prospectus. Read it carefully before you invest or send money.
Fidelity Distributors Corporation, 82 Devonshire Street, Boston, MA 02109
Fidelity Investments Institutional Services Company, Inc.
82 Devonshire Street, Boston, MA 02109
Fidelity Investments
Third Party Rankings for Periods Ending April 30, 2005
Lipper Investment Objectives*
*Funds are ranked within a universe of funds with similar investment objectives. Rankings are based on total return and include the reinvestment of dividends and capital gains but exclude the effect for the fund's sales load, if applicable. Past performance is no guarantee of future results. Lipper Inc. is a nationally recognized organization that ranks the performance of mutual funds.
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| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| ARIZONA MUNICIPAL |
|
|
|
|
|
|
| Spartan AZ Muni Income |
13 |
32 |
5 |
32 |
3 |
21 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| CALIFORNIA MUNICIPAL |
|
|
|
|
|
|
| FA CA Muni Income-CL A |
58 |
125 |
|
|
|
|
| FA CA Muni Income-CL B |
101 |
125 |
|
|
|
|
| FA CA Muni Income-CL C |
102 |
125 |
|
|
|
|
| FA CA Muni Income-CL I |
51 |
125 |
|
|
|
|
| FA CA Muni Income-CL T |
65 |
125 |
|
|
|
|
| Spartan CA Muni Income |
50 |
125 |
27 |
99 |
7 |
66 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| CONNECTICUT MUNICIPAL |
|
|
|
|
|
|
| Spartan CT Muni Income |
13 |
22 |
6 |
21 |
1 |
13 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| FLORIDA MUNICIPAL |
|
|
|
|
|
|
| Spartan FL Muni Income |
20 |
56 |
9 |
54 |
4 |
37 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| GNMA |
|
|
|
|
|
|
| Ginnie Mae |
13 |
64 |
13 |
46 |
6 |
31 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| GENERAL MUNICIPAL |
|
|
|
|
|
|
| FA Municipal Income-CL A |
42 |
280 |
23 |
224 |
|
|
| FA Municipal Income-CL B |
89 |
280 |
81 |
224 |
63 |
143 |
| FA Municipal Income-CL C |
116 |
280 |
91 |
224 |
|
|
| FA Municipal Income-CL I |
29 |
280 |
14 |
224 |
|
|
| FA Municipal Income-CL T |
45 |
280 |
24 |
224 |
12 |
143 |
| Spartan Municipal Income |
34 |
280 |
13 |
224 |
5 |
143 |
| Spartan Tax-Free Bond |
16 |
280 |
|
|
|
|
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| GENERAL U.S. GOVT |
|
|
|
|
|
|
| FA Govt Inv-CL A |
66 |
182 |
35 |
134 |
|
|
| FA Govt Inv-CL B |
130 |
182 |
79 |
134 |
55 |
82 |
| FA Govt Inv-CL C |
128 |
182 |
86 |
134 |
|
|
| FA Govt Inv-CL I |
58 |
182 |
27 |
134 |
|
|
| FA Govt Inv-CL T |
86 |
182 |
43 |
134 |
29 |
82 |
| Government Income |
48 |
182 |
28 |
134 |
15 |
82 |
| Spartan Govt. Income |
38 |
182 |
17 |
134 |
6 |
82 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| INTERM INV GRADE (VIP) |
|
|
|
|
|
|
| VIP Investment Grade - IC |
20 |
47 |
4 |
29 |
4 |
13 |
| VIP Investment Grade - SC |
25 |
47 |
|
|
|
|
| VIP Investment Grade - SC 2 |
27 |
47 |
10 |
29 |
|
|
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| INTERMEDIATE INV GRADE |
|
|
|
|
|
|
| FA Investment Grd Bd-CL A |
144 |
453 |
|
|
|
|
| FA Investment Grd Bd-CL B |
289 |
453 |
|
|
|
|
| FA Investment Grd Bd-CL C |
299 |
453 |
|
|
|
|
| FA Investment Grd Bd-CL I |
102 |
453 |
|
|
|
|
| FA Investment Grd Bd-CL T |
139 |
453 |
|
|
|
|
| Investment Grade Bond |
97 |
453 |
61 |
265 |
39 |
135 |
| Spartan Inv. Grade Bond |
57 |
453 |
36 |
265 |
17 |
135 |
| Total Bond Fund |
50 |
453 |
|
|
|
|
| U.S. Bond Index Fund |
143 |
453 |
48 |
265 |
19 |
135 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| INTERMEDIATE MUNICIPAL |
|
|
|
|
|
|
| Spartan Int. Muni Income |
21 |
156 |
9 |
95 |
6 |
68 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| MARYLAND MUNICIPAL |
|
|
|
|
|
|
| Spartan MD Muni Income |
11 |
36 |
6 |
31 |
1 |
22 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| MASSACHUSETTS MUNI |
|
|
|
|
|
|
| Spartan MA Muni Income |
9 |
52 |
3 |
46 |
2 |
35 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| MICHIGAN MUNICIPAL |
|
|
|
|
|
|
| Spartan MI Muni Income |
13 |
37 |
6 |
36 |
5 |
28 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| MINNESOTA MUNICIPAL |
|
|
|
|
|
|
| Spartan MN Muni Income |
29 |
49 |
13 |
44 |
8 |
36 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| NEW JERSEY MUNICIPAL |
|
|
|
|
|
|
| Spartan NJ Muni Income |
16 |
56 |
10 |
50 |
4 |
36 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| NEW YORK MUNICIPAL |
|
|
|
|
|
|
| FA NY Muni Income-CL A |
34 |
110 |
|
|
|
|
| FA NY Muni Income-CL B |
62 |
110 |
|
|
|
|
| FA NY Muni Income-CL C |
68 |
110 |
|
|
|
|
| FA NY Muni Income-CL I |
29 |
110 |
|
|
|
|
| FA NY Muni Income-CL T |
37 |
110 |
|
|
|
|
| Spartan NY Muni Income |
23 |
110 |
7 |
89 |
3 |
61 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| OHIO MUNICIPAL |
|
|
|
|
|
|
| Spartan OH Muni Income |
8 |
42 |
3 |
38 |
3 |
31 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| PENNSYLVANIA MUNICIPAL |
|
|
|
|
|
|
| Spartan PA Muni Income |
17 |
61 |
14 |
60 |
8 |
48 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| SHORT INVESTMENT GRADE |
|
|
|
|
|
|
| FA Short Fixed-Inc -CL A |
68 |
208 |
23 |
105 |
|
|
| FA Short Fixed-Inc -CL B |
163 |
208 |
|
|
|
|
| FA Short Fixed-Inc -CL C |
165 |
208 |
78 |
105 |
|
|
| FA Short Fixed-Income Fixed-Inc -CL I |
53 |
208 |
15 |
105 |
|
|
| FA Short Fixed-Inc -CL T |
65 |
208 |
24 |
105 |
19 |
56 |
| Short-Term Bond |
48 |
208 |
11 |
105 |
8 |
56 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| SHORT U.S. GOVERNMENT |
|
|
|
|
|
|
| NCCMT-Term Portfolio |
31 |
87 |
63 |
66 |
41 |
51 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| SHORT-INT INVESTMENT |
|
|
|
|
|
|
| FA Intermed Bond -CL A |
19 |
152 |
9 |
98 |
|
|
| FA Intermed Bond -CL B |
69 |
152 |
38 |
98 |
37 |
49 |
| FA Intermed Bond -CL C |
66 |
152 |
42 |
98 |
|
|
| FA Intermed Bond -CL I |
12 |
152 |
5 |
98 |
8 |
49 |
| FA Intermed Bond -CL T |
20 |
152 |
13 |
98 |
16 |
49 |
| Intermediate Bond |
16 |
152 |
6 |
98 |
7 |
49 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| SHORT-INT MUNICIPAL |
|
|
|
|
|
|
| FA Short Int. Muni -CL A |
21 |
48 |
|
|
|
|
| FA Short Int. Muni -CL B |
36 |
48 |
|
|
|
|
| FA Short Int. Muni -CL C |
40 |
48 |
|
|
|
|
| FA Short Int. Muni -CL I |
15 |
48 |
|
|
|
|
| FA Short Int. Muni -CL T |
25 |
48 |
|
|
|
|
| Spartan Short-Int. Muni |
15 |
48 |
15 |
29 |
6 |
21 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| SHORT-INT U.S. GOVT |
|
|
|
|
|
|
| Inst Sht-Int Govt |
56 |
78 |
30 |
66 |
15 |
46 |
| Intermediate Govt Income |
14 |
78 |
3 |
66 |
4 |
46 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| TREAS-INFL PROTECTED |
|
|
|
|
|
|
| FA Infl-Prot Bond Class A |
21 |
67 |
|
|
|
|
| FA Infl-Prot Bond Class B |
40 |
67 |
|
|
|
|
| FA Infl-Prot Bond Class C |
42 |
67 |
|
|
|
|
| FA Infl-Prot Bond Class I |
19 |
67 |
|
|
|
|
| FA Infl-Prot Bond Class T |
23 |
67 |
|
|
|
|
| Inflation-Protected Bond |
15 |
67 |
|
|
|
|
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| U.S. MORTGAGE |
|
|
|
|
|
|
| FA Mortgage Sec -CL A |
25 |
85 |
13 |
60 |
|
|
| FA Mortgage Sec -CL B |
52 |
85 |
37 |
60 |
|
|
| FA Mortgage Sec -CL C |
58 |
85 |
|
|
|
|
| FA Mortgage Sec -CL I |
16 |
85 |
10 |
60 |
|
|
| FA Mortgage Sec -CL T |
30 |
85 |
15 |
60 |
|
|
| Mortgage Securities |
14 |
85 |
9 |
60 |
6 |
44 |
|
|
| Fund Name |
1-Year Rank |
1-Year Count |
5-Year Rank |
5-Year Count |
10-Year Rank |
10-Year Count |
| ULTRA-SHORT OBLIGATION |
|
|
|
|
|
|
| Ultra-Short Bond |
31 |
71 |
|
|
|
|
|
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