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Rating:Fidelity to Launch K Shares Not Rated 3.0 Email Routing List Email & Route  Print Print
Monday, March 24, 2008

Fidelity to Launch K Shares

by: Sean Hanna, Editor in Chief

Fidelity Investments plans to launch new "Class K" shares that carry ultra-low expense ratios for plan participants. The Boston Behemoth filed paperwork with the SEC in early March for the share class (see the filing for the Magellan Fund here).

The Magellan class K shares will carry a 35 basis point investment management fee and just 6 bps in other expenses. The overall expense ratio works out to 41 bps.

Regular shares in Magellan carry a 54 bp expense ratio.

Meanwhile, ContraFund class K shares ring up to 77 bps, including 71 bps in management fees and 6 bps in other expenses (see the ContraFund filing here).

In all, Fidelity made 318 filings for multiple funds (see list at the SEC).

The lower priced shares should be especially attractive to plan sponsors already with plans already generating sufficient revenues to create ERISA budget credits and to plans paying their advisor through a wrap or fixed fee. The K shares do not carry any 12b-1 fee for distribution. 

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