BlackRock, Fidelity Unveil Diversified Income Portfolio

ETF Trends

BlackRock (BLK), the world’s largest asset manager, and mutual fund giant Fidelity today announced the launch of the BlackRock Diversified Income Portfolio, an ETF managed account product that expands the partnership started by the two firms over a year ago.

“The BlackRock Diversified Income Portfolio is an ETF managed account that will be available exclusively to all eligible retail investors through Fidelity’s managed accounts service beginning May 1,” according to a statement issued by the firms.

The product is a multi-asset, income-generating solution constructed using mostly ETFs. BlackRock Diversified Income Portfolio will provide investors with income opportunities across various asset classes, regions and sectors.

In March 2013, BlackRock and Fidelity unveiled a partnership that included Fidelity offering more iShares ETFs commission-free and new portfolio strategies comprised of iShares funds. The firms described the alliance as a “long-term strategic alliance that provides extensive collaboration across Fidelity’s distribution and asset management organizations with BlackRock and its leading ETF provider, iShares.” [BlackRock, Fidelity Launch ETF Partnership]

Today, the two companies also announced that over the past year, investors and advisors invested 86 percent more in the 65 iShares ETFs that can be purchased commission-free through Fidelity than in the prior year, according to the statement.

“Last year we doubled down on our partnership with Fidelity and we are thrilled with the results,” said Mark Wiedman, global head of iShares at BlackRock, in the statement. “The outsized growth we’ve seen in our commission-free iShares ETFs, coupled with the increase in Fidelity accounts holding our funds, speaks volumes to how our growing partnership is resonating with the millions of investors who are turning to iShares ETFs for their long-term holdings.”

iShares ETFs available through Fidelity on a commission-free basis include the iShares Core S&P 500 ETF (IVV) , the iShares Select Dividend ETF (DVY) and the iShares MSCI USA Minimum Volatility ETF (USMV) .

In October 2013, Fidelity rolled out 10 sector ETF sub-advised by BlackRock. In the first five months the 10 low-cost Fidelity passive sector ETFs, sub-advised by BlackRock, attracted more than $500 million in assets, the two firms said. The largest of those ETFs is the Fidelity MSCI Health Care Index ETF (FHLC) , which has $113.3 million in assets under management. [Fidelity Sector ETFs off to Strong Start]

“Annual advisory fees on the new Fidelity managed account will be between 0.55 percent and 1.1 percent of total assets invested, depending on the size of the investment,” according to Reuters.

ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of DVY.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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