Fidelity OTC share class and ESG fund change

Fidelity OTC share class change

Effective April 2, 2018, the Plan converted from Fidelity OTC (FOCPX) to the Fidelity OTC - K class shares (FOCKX). This is the same portfolio, but is a lower fee share class. The gross expense ratio of this fund is 70 basis points (bps) with an annual reimbursement of 20 bps, resulting in a net expense ratio of 50 bps. This is a reduction from the current net expense ratio of 56 bps. The transaction closed on April 2nd, showing a sale of FOCPX and a purchase of FOCKX. 

Although the price per share is different, the value invested remains the same.

Environmental, Social and Governance (ESG) fund change

Also changing on April 2, 2018 was the ESG fund. You may have heard of the term ESG in investing before and wondered what it means. ESG investment strategies focus not only on financial information for the companies they invest in, but also non-financial information, such as company sustainability, the community impact, the diversity of the board of directors, and the company’s labor practices when selecting investment for the portfolio. The companies in the portfolio are evaluated on their environmental and social impacts of their products, services and production processes. The management, or governance, of companies are scrutinized for good corporate behavior and good corporate citizenship. These include issues such as leadership diversity and fair and safe treatment of workers, to managing the business in a sustainable manner to ensure long-term success for those invested in them.

For several years, the Plan has offered the Pax Balanced Fund as the ESG investment option for Plan participants. Effective March 1, 2018, the ESG option offered in the Plan will be the Pax Global Environment Markets Fund. The Pax World Balanced Fund will be eliminated as an investment option on April 2, 2018.

About the Pax Global Environmental Markets Fund

This fund may be appropriate for participants who want to promote through their investing a more sustainable world. Using a research-intensive bottom-up stock selection process, the fund’s managers seek out and invest in companies that are developing innovative solutions to resource challenges. Thus, the Pax Global Environmental Markets Fund typically invests in companies that engage in:

  • Energy efficiency
  • Renewable and alternative energy
  • Water infrastructure
  • Pollution control
  • Waste management
  • Environmental support services
  • Sustainable food, agriculture and forestry

While offering participants a way to invest in a fossil fuel-free strategy, the Fund also offers an opportunity to take of advantage of growing evidence suggesting that an ESG presence in a portfolio may offer potential for good long-term investment growth.

If you had assets in the Pax World Balanced Fund

Participants invested in this Fund will receive a letter in February explaining this change, and offering information on how to invest in the new ESG option. Participants who do not transfer existing balances from the Pax World Balanced Fund before April 2, 2018 will have assets in this fund automatically mapped to the Vanguard Wellington Balanced Fund. The mapping must be done according to asset category instead of investing themes. This transfer will be reflected in the Quarterly Statement that accompanies the April newsletter.

If you wish to invest in the Plan’s ESG specialty option, log on to your Plan account at our Web site,, to initiate an exchange or begin directing deferrals into it. Or you may contact an Account Executive or call the HELPLINE at 1-800-422-8463 for assistance.

Investing involves market risk, including possible loss of principal. Funds that invest internationally involve risks not associated with investing solely in the U.S., such as currency fluctuation, political risk, differences in accounting and the limited availability of information. No investment strategy or program can guarantee a profit or avoid loss. Actual results will vary depending on your investment and market experience.

Account Executives cannot offer investment, tax or legal advice. You should consult your own counsel before making retirement plan decisions.

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