Fidelity index fund security lending in 2018

Fidelity stock index funds earn additional income by lending securities to qualified institutional borrowers.

A fund’s expenses are paid out of fund earnings. Given that the US tax code gives a tax preference to dividends that qualify for lower tax rates, it is prudent for fund managers to allocate non-qualified income to fund expenses. The table below shows the amount of security lending income earned by each fund in fiscal year 2018 and calculates its percentage ratio to total annual fund expenses.

Fund Net security lending income Total expenses % of expenses
Total Market 0 14,185,504 0.00%
S&P 500 2,895 45,751,000 0.01%
Extended market 0  13,914,991 0.00%
Large growth 52,366 371,783 14.09%
Large value 24,082 364,386 6.61%
Mid cap 364 2,598,989 0.01%
Small cap 26,597 2,031,722 1.31%
Emerging markets 89,727 1,353,307 6.63%
Global ex-US 253,288 2,252,747 11.24%
International 0 12,684,584 0.00%
Total International 7,262 308,982 2.35%

Notes

Table data is derived from fund annual reports for fiscal year 2018. The computations are derived from the linked spreadsheet: Fidelity index fund security lending.

About

Barry Barnitz, administrator of both the Bogleheads® wiki and of Financial Page, a Bogleheads® blog

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