Fidelity has long been one of the giants of active management and index funds. Those core competencies are coming together as the fund powerhouse forays into active non-transparent ETFs (ANTs), which it did in June with three new products.
That trio includes the Fidelity New Millennium ETF (FMIL).
FMIL will normally invest primarily in equity securities that are either “growth” stocks or “value” stocks, or a combination of both types. The Adviser will seek to identify early signs of long-term changes in the marketplace and to focus on those companies that may benefit from opportunities created by these changes and will favor companies that show potential for stronger-than-expected earnings or growth and industries that are undervalued or out-of-favor. The fund’s strategy can lead to investments in small and medium-sized companies.
Focusing on FMIL
The fund seeks long-term growth of capital. Normally investing primarily in equity securities. Identifying early signs of long-term changes in the marketplace and focusing on those companies that may benefit from opportunities created by these changes by examining technological advances, product innovation, economic plans, demographics, social attitudes, and other factors, which can lead to investments in small and medium-sized companies.
Investors can now access the stock-picking expertise from Fidelity’s historied money managers through a new non-transparent ETF offering. The advent of nontransparent ETFs is “the next evolution” of ETFs. FMIL is one of three new non-transparent ETFs that were adapted from Fidelity’s active mutual fund side.
The fund is basically an ETF version of an existing Fidelity mutual fund, which has been available to investors for decades – Fidelity New Millennium Fund (FMILX). FMILX has been around since 1992 and has $2.2 billion in assets under management. However, the ETF is cheaper than the mutual fund, with a 0.59% expense ratio vs a 0.69% expense ratio.
FMIL employs a traditional mutual fund strategy that enjoys the benefits of the ETF investment structure. The new active equity ETF harnesses the power of Fidelity’s 74-year-old legacy of active management delivered with the tax efficiency, trading flexibility, and potential cost efficiency benefits ETF vehicles offer.
For more on active strategies, visit our Active ETFs 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.
