20 C
New York
Friday, June 2, 2023

Fidelity offer of no-fee index funds hurts shares of rivals

Fidelity offer of no-fee index funds hurts shares of rivalsFidelity offer of no-fee index funds hurts shares of rivals

By Tim McLaughlin and Ross Kerber

BOSTON (Reuters) – Fidelity Investments’ plan to launch no-fee index funds hurt the shares of rival asset managers, including BlackRock Inc (NYSE:), on Wednesday as investors worried about lower profits.

“This news has likely led to the significant selling off of asset manager stocks today with many of the stocks we track down (3 percent to 5 percent) versus flat for the ,” Wells Fargo (NYSE:) analyst Christopher Harris said in a research note.

“We wouldn’t think the Fidelity funds in and of themselves would lead to much change with respect to asset flows, but investors are likely concerned about the follow-on effects,” Harris said. “For instance, do other passive index providers lower their fees in response?”

Publicly-traded asset managers whose shares declined on Wednesday include BlackRock down 4 percent at midday, Legg Mason Inc (NYSE:) down 5 percent, and T. Rowe Price Group down 3 percent.

Boston-based Fidelity said the Zero Total Market Index Fund and the Zero International Index Fund will be available to investors on Friday.

“Investors will pay a 0.00 percent fee, regardless of how much they invest in either fund, while gaining exposure to nearly the entire global stock market,” Fidelity said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Investing.com

Related Articles

Stay Connected

- Advertisement -

Latest Articles

Popular Articles