Fidelity Investments has completed six mutual-fund-to-ETF conversions, bringing its total ETF roster to 64 total ETFs. The new active ETF strategies include the Fidelity Enhanced Large Cap Core ETF (FELC), Fidelity Enhanced Large Cap Growth ETF (FELG), Fidelity Enhanced Large Cap Value ETF (FELV), the Fidelity Enhanced Mid Cap ETF (FMDE), Fidelity Enhanced Small Cap ETF (FESM), and the Fidelity Enhanced International ETF (FENI).
See more: “Fidelity Poised to Be an Active ETF Leader”
Announced for conversion in June, the new ETFs’ previous mutual fund iterations launched in 2007. FELC, FELG, and FELV will charge 18 bps. FMDE will charge 23 bps. Both FESM and FENI will charge 28 bps. The enhanced ETF suite will charge a relatively low set of fees. Additionally, the firm announced it reduced the total expense ratios of its 13 equity factor ETFs by almost half.
“Fidelity has shown strong commitment to being a leading provider of actively managed ETFs,” said VettaFi head of research Todd Rosenbluth. “They are using their scale to offer competitively priced ETFs and leveraging long-standing track records.”
Fidelity’s Six Active ETF Conversions
The move comes as many asset managers have migrated from relying significantly on mutual funds to the more tax efficient ETF wrapper. Each new active ETF conversion will maintain the same investment objectives. They will be managed in the same manner as their mutual fund antecedents. Each of the active ETFs relies on a proprietary investment process looking to outperform their benchmarks. They will use quantitative factors like growth, profitability, and historical valuations.
“Fidelity is committed to offering investors innovative ETFs to meet their evolving needs, including active, passive, and factor strategies,” said Greg Friedman, Fidelity’s Head of ETF Management and Strategy. “We continue to see demand for active ETFs as investors seek the potential for outperformance with the benefits of an ETF wrapper. Adding these six active equity ETFs can serve as core building blocks for investors to meet this need.”
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