Fidelity expands ETF partnership with BlackRock

Wed Mar 13, 2013 12:49pm EDT
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By Aaron Pressman

BOSTON (Reuters) - Fidelity Investments has expanded its 3-year-old partnership with BlackRock Inc (BLK.N: Quote) to offer its customers free trading of more exchange-traded funds, as the once-dominant mutual fund company strives to catch up in a faster-growing market.

Fidelity brokerage customers will be able to trade 65 BlackRock iShares ETFs without paying a commission, up from 30 funds currently, the two firms said on Wednesday.

BlackRock will also help Fidelity develop an investment strategy for clients based on a mix of ETFs and will support some of the firm's own efforts to start a new line of equity sector ETFs.

Boston-based Fidelity, which manages some $1.7 trillion, mostly in mutual funds, has largely been left behind in the ETF explosion of the past decade.

By contrast, BlackRock acquired top ETF provider iShares in 2009. Among its nearly $4 trillion of total assets, it oversees $708 billion of ETFs.

Neither BlackRock nor Fidelity would say how many customers have used the free trading program over the past three years or how much money they have invested in iShares funds.

New York-based BlackRock pays Fidelity marketing fees for the commission-free ETF transactions as part of the deal.

The company said it wanted more access to Fidelity's millions of brokerage customers and to registered investment advisers who use Fidelity's platform.   Continued...

A BlackRock building is seen in New York June 12, 2009. REUTERS/Eric Thayer