Fidelity Investments and New York-listed BlackRock have announced a long-term strategic alliance through which the two firms will leverage each other’s strengths to deliver exchange-traded funds and research to clients.

The move comes at time when, according to BlackRock, the size of the global exchange-traded products industry has now surpassed $2 trillion (view here), while research from Fidelity suggests that ETF investing is poised to increase further in 2013.

The firms said the partnership will give Fidelity's roughly 10 million customers greater access to a range of passive ETF solutions provided by iShares, BlackRock’s ETF business.

Mark Wiedman, global head of iShares at BlackRock, said the firms have created an ETF manufacturing and distribution "powerhouse,” in a move which will enable millions of investors to “maximize the value of ETF investing.”

As a result, Fidelity will more than double its current online commission-free ETF offerings and will create new ETF portfolio strategies using iShares as components within its managed account offering, the firm said.

Fidelity is increasing the number of iShares ETFs that can be traded commission-free on Fidelity’s website from 30 to 65. The new list includes all ten iShares Core ETFs, as well as a range of international, domestic and specialized equity, fixed income, and commodities offerings.

Both companies will deliver iShares ETFs to Fidelity customers through their respective retail and advisor networks.

Other benefits

Meanwhile, the link-up with BlackRock will also help Fidelity in terms of its future passive sector investment management efforts, while RIA customers on the Fidelity Institutional Wealth Services platform will benefit from an expanded roster of 65 commission-free ETFs.

Furthermore, Fidelity will extend its managed account offerings by making available to clients new ETF managed portfolios using iShares as components within its Portfolio Advisory Services offering, which currently provides professional money management and access to proprietary research through model portfolios of mutual funds and personalized portfolios using mutual funds, ETFs and separate accounts.

Fidelity highlighted that client investments have increased by 73 per cent within its managed accounts products over the past three years. “Fidelity and BlackRock will jointly focus on providing innovative ETF-based solutions on an ongoing basis as part of this partnership,” it said.

While actively-managed sector strategies will continue to be a core focus, Fidelity said it intends to deploy passive sector capabilities as part of its expanding sector-based strategy, working with BlackRock as part of those efforts.