Fidelity Beefs Up Three Fund Families

March 1, 2006 ( - Fidelity Investments has unveiled enhancements to its Fidelity, Advisor and VIP Freedom Fund portfolios.

A Fidelity news release said that the company will offer two new Freedom Funds, add Fidelity Strategic Real Return Fund (with Advisor share classes) as an underlying fund to the Fidelity and Advisor Freedom Fund portfolios, and make structural enhancements to its Freedom Fund product lines. Over the past three years, total assets in all of Fidelity’s Freedom product lines have grown 248%, to $45.9 billion as of January 31, 2006, Fidelity said.


Specifically, Fidelity has filed a registration statement with the US Securities and Exchange Commission to offer:

  • Fidelity Freedom 2045
  • Fidelity Advisor Freedom 2045
  • Fidelity Freedom 2050
  • Fidelity Advisor Freedom 2050 funds.

The funds are expected to be available to investors in June.

Fidelity also announced the addition of Fidelity Strategic Real Return Fund (with Advisor share classes) to the investment grade fixed   income portions of the Fidelity and Fidelity Advisor Freedom Fund lineups. Strategic Real Return Fund is a multi-asset class fund designed to provide shareholders with the potential to outpace inflation while assuming reasonable investment risk. The fund is structured around four general investment categories: inflation-protected debt securities, floating-rate loans, commodity linked notes and related investments, and real estate investment trusts (REITs) and other real estate-related investments.

Rolling Down

In addition, Fidelity announced that it is extending the “rolldown” periods ofthe Freedom Funds product lines by five years. Previously, each Freedom Fund was expected to “roll down” into an appropriate Freedom Income Fund between five and 10 years after the target retirement date. In order to best accommodate increasing life expectancies and higher inflation pressures due to rising health care and other expenses, the rolldown for the Freedom Fund product lines have been lengthened by five years to approximately 10 to 15 years after the target retirement date. This change will have the effect of increasing the equity exposure of the Freedom Funds with target dates closest to retirement – currently Fidelity Freedom 2000; and Fidelity Freedom, Fidelity Advisor Freedom, VIP Freedom and VIP Investor Freedom 2005, 2010, and 2015 – by up to 5%.

Additionally, the allocation to international equity funds in the Fidelity, Fidelity Advisor and VIP Freedom Funds will be increased by up to 5%. Exposure to domestic equity funds will be reduced by a corresponding amount.

The Fidelity, Fidelity Advisor and VIP Freedom Funds are lifecycle funds that are managed to specific target retirement dates. They are offered directly to investors, through Fidelity managed group retirement plans, and through investment professionals at banks, brokerage firms and insurance companies.