Fidelity Investments has launched eight new actively managed thematic mutual funds, most of them priced to attract long-term investors.
Six of the eight funds provide discounts to their 1% expense ratio if investors remain in the funds for at least a year. That discount is 25%, and it grows to 50% if the investors stay with the fund for three years.
“We designed this new time-based pricing structure to encourage long-term investing aligned with the disruptive funds’ strategies,” said Colby Penzone, head of investment product for Fidelity, in a statement.
He noted that disruptive strategies are often thought of as short-term investments, but their impact and duration tend to continue much longer. “The disruptive funds are designed to capture long-term opportunities and we want to reward our customers by taking a similarly long-term view in their accounts,” Penzone said.
The six disruptive funds are:
- Fidelity Disruptive Automation Fund (FBOTX)
- Fidelity Disruptive Communications Funds (FNETX)
- Fidelity Disruptive Finance Fund (FNTEX)
- Fidelity Disruptive Medicine Fund (FMEDX)
- Fidelity Disruptive Technology Fund (FTEKX)
- Fidelity Disruptors Fund (FGDFX)
The other two new funds are the Fidelity Agricultural Productivity Fund (FARMX) and Fidelity Water Sustainability Fund (FLOWX).
Todd Rosenbluth, director of mutual and exchange-traded fund research at CFRA, says the fee discounts are compelling. ”These are long-term strategies, and investors staying loyal to those strategies stand to benefit from the opportunity of those themes playing out,” says Rosenbluth.