Increasingly, asset managers are taking to new forms of media to communicate the merits of ETFs. For Fidelity Investments’ Greg Friedman, the firm’s head of ETF management and strategy, that means taking to Reddit. Friedman hosted an AMA in Fidelity’s subreddit, r/fidelityinvestments, a couple weeks ago.
See more: The Rise of Active Bond ETFs
For those unfamiliar with the sprawling site’s Ask Me Anything (AMA) tradition, commentors ask questions, and the AMA host answers. AMAs have allowed almost anyone to ask questions of key figures across industries, media, and more.
In this case, Friedman took the opportunity to not only discuss Fidelity’s ETFs, but the virtues of the ETF wrapper itself. For example, one commenter, u/medloving, asked why ETFs are often said to be more tax-efficient than mutual funds.
“In simple terms, ETFs may be more tax efficient than similar mutual funds. It’s because investor trades can be matched on the secondary market,” Friedman wrote. “While investing isn’t a one-size-fits-all approach, and as head of ETF management and strategy, I obviously have a bit of a bias, an example could be that an ETF may work effectively in a taxable account, where a mutual fund may be more efficient for a retirement account.”
Active ETF Discussion
Following their banner year in 2023, active ETFs also stood out as a discussion topic in the chat. For one user, u/Healingjoe, the question about active ETFs was very general – what long-term investing approach calls for their use?
“Typically, an effective portfolio may consist of a combination of passive and active strategies. Fidelity fits into the picture with our long history of active management, which includes fundamental and quantitative research,” Friedman wrote.
“All of this to say, active ETFs may be an option for someone who wants to gain access to Fidelity’s history of active management through the ETF wrapper,” he added, pointing to tax efficiency, low expenses, and flexibility as three key benefits offered by active ETFs.
Friedman, who joined the firm 12 years ago following roles at Russell Investments and Barclays Global Investors, also took the time during the AMA to point out the firm’s two new active ETFs.
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