Fidelity is deepening its push into the actively managed exchange traded funds arena, saying Monday it will introduce ETF equivalents of four of its famed active mutual funds.
The Boston-based fund giant said it’s launching the Fidelity Growth Opportunities ETF (FGRO), Fidelity Magellan ETF (FMAG), Fidelity Real Estate Investment ETF (FPRO) and Fidelity Small-Mid Cap Opportunities ETF (FSMO) later this week. Those new active ETFs will trade on CBOE.
“The first three will each have a net expense ratio of 0.59% and use the same portfolio managers and research teams as their like-named mutual funds, while the Fidelity Small-Mid Cap Opportunities ETF will have a net expense ratio of 0.64% and utilize a new quantitative approach,” reports Jeff Berman for ThinkAdvisor.
Last June, Fidelity Investments introduced its first suite of active equity ETFs, that unlike traditional ETFs, do not tell the public what assets they hold each day.
What Active Options Will Investors Have?
The three new ETFs are available commission-free to individual investors and financial advisors through Fidelity’s online brokerage platforms. The active equity ETFs are competitively priced with total expense ratios of 0.59% each. They will utilize the same portfolio managers and research teams as their like-named mutual funds.
The Fidelity approach uses a proxy basket methodology, allowing for seamless implementation that uses existing infrastructure and requires very little operational build-out. Adding the methodology helps to protect the firm’s insights and research while providing sufficient information to efficiently affect a trade.
Fidelity’s active equity ETFs will employ an innovative tracking basket methodology, which maintains the benefits of the ETF structure, provides information to market participants to promote efficient trading of shares, and preserves the ability to add value through active management.
“Among the new ETFs, FMAG is managed by Sammy Simnegar and will seek long-term growth of capital and normally invest primarily in equity securities,” adds ThinkAdvisor. “FGRO is led by Kyle Weaver and will seek long-term growth of capital and normally invest mainly in equity securities of companies that Fidelity Management & Research Co. believes have above-average growth potential.”
For more on active strategies, visit our Active ETF Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, 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.
