Fidelity Files to Launch Active ETFs
December 10th 2012 at 8:08am by John Spence
Fidelity Investments has filed to launch actively managed exchange traded funds and its first ETF offering in the series would be a corporate bond fund.
Fidelity only has one ETF currently, Fidelity Nasdaq Composite Index (NasdaqGM: ONEQ), but the firm was expected to expand its lineup following the hire of State Street (NYSE: STT) veteran Tony Rochte.
In September, a report surfaced that Fidelity was launching a new ETF business based in Denver headed by Rochte. [Fidelity's New ETF Division]
According to a Dec. 7 filing, Fidelity currently plans to name the initial fund the Fidelity Corporate Bond ETF. The firm is planning to launch additional active fixed-income and equity ETFs.
Fidelity “wants approval for a series of exchange traded funds that would be eligible to invest in stocks, bonds or other assets, including mutual funds or ETFs,” Bloomberg News reports. “Fidelity could yet become the first major mutual-fund firm to introduce ETFs run by active stock pickers.”
Fidelity had been working on listing a family of ETFs based on its stable of active sector mutual funds, according to the report.
In the recent filing, Fidelity said the active ETFs would publish the composition of their portfolios every day, making them “largely transparent.”
“Our decision to file for exemptive relief is part of Fidelity’s ongoing commitment to always look for new ways to provide our clients with the products and services they need to meet their financial goals,” said Fidelity spokesman Jeff Cathie in an Ignites.com report.
According to the filing, the Fidelity active ETFs may make use of derivatives. In a speech last week, Norm Champ, director of the SEC’s investment management division, said the regulator was lifting a moratorium on active ETFs that invest in derivatives. [SEC to Lift Freeze on Active ETFs]
The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.