Fidelity dropped the 3% sales commission that investors pay to get into the $61.17 billion Magellan fund along with the Contrafund, Contrafund II, Low-Priced Stock and New Millennium funds. With the change, all of Fidelity’s diversified stock funds sold to individual investors will be offered without a sales commission, according to a Reuters report.
This is the second such action for the nation’s largest mutual fund company. Earlier this year, Fidelity wiped out the front-end sales charges from nine of its international stock funds and had temporarily waived the charge on Contrafund to draw investors.
Fidelity said the move came to spark interest in investments into these funds from individual investors, since the majority of the assets invested in these funds are in retirement plans that do not have sales charges. Overall, money from the sales commissions made up a very small percentage of the company’s overall revenue.
However, despite the recent change in diversified funds, the company’s 41 sector and industry funds will still carry the charges.
Separately, Fidelity Monday rolled out three new value-oriented stock funds that focus on blue chip companies that are undervalued. To be managed by Brian Hogan, those funds are:
- Blue Chip Value Fund
- Advisor Value Leaders Fund
- VIP Value Leaders funds Fund.