Fidelity Investments is launching a new exchange traded fund business based in Denver that will be headed by a former executive at ETF heavyweight State Street Global Advisors, according to a report Monday.
The new Fidelity division is called SelectCo, according to an RIABiz.com report.
“SelectCo appears to be an attempt on Fidelity’s part to catch a third wave of niche interest in exchange traded funds after having missed the first two. It is to be headed by ex-State Street Global Advisors luminary Anthony Rochte, who brings an in-depth knowledge of ETF products,” according to the report.
In August, Bloomberg reported that Fidelity was planning active ETFs based on the company’s sector funds. It is assumed that Rochte, who was hired from State Street, would oversee the ETF unit. [Fidelity Active ETFs Would Gain Market Share: S&P]
ETF industry observers have speculated for years that at some point Fidelity will expand its lineup beyond its current single offering, Fidelity Nasdaq Composite Index (NasdaqGM: ONEQ). [Fidelity Reportedly Preparing Active ETFs]
Fidelity hired Rochte in March. He previously worked for Fidelity between 1996 and 2000. [Fidelity Hires State Street ETF Exec Rochte]
This is the first time that Fidelity has acknowledged the new division and confirmed its name, RIABiz reports.
“But, Fidelity is declining to disclose the exact mission of SelectCo, saying only that it will focus on new options in sector investing, leaving analysts speculating that the only new options in sector investing — and certainly the only niche that makes sense for Fidelity — is actively managed ETFs in sector investing,” according to the story.
“’SelectCo’ is not a brand name, but a temporary designation for the unit, only used internally at Fidelity. It is in the early stages of building this new division and may consider a different name in the future,” RIABiz reported.
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