Fidelity Investments is adding four new, competitively priced active equity exchange-traded funds to its lineup on or about this Thursday, expanding its total ETF offerings to 37 including active equity and bond ETFs, factor ETFs and sector ETFs, it said Monday.
The new ETFs are Fidelity Growth Opportunities ETF (FGRO), Fidelity Magellan ETF (FMAG), Fidelity Real Estate Investment ETF (FPRO) and Fidelity Small-Mid Cap Opportunities ETF (FSMO). All four will be listed on the Cboe BZX Exchange.
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, which the firm said “extracts fundamental insights from Fidelity’s experienced small-cap, mid-cap, growth and value investment teams.”
In June, Fidelity launched its first suite of active equity ETFs: Fidelity Blue Chip Growth ETF (FBCG), Fidelity Blue Chip Value ETF (FBCV) and Fidelity New Millennium ETF (FMIL), becoming the latest asset manager to bring to market actively managed nontransparent ETFs.
Fidelity’s Magellan Fund began trading in 1963 and was led by Peter Lynch from 1977 to 1990 — when it grew from about $18 million in assets to $14 billion. Today, FMAGX has roughly $22 billion in assets with an expense ratio of 0.77%.
New ETF Details
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.
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.
FPRO is managed by Steve Buller and will seek above-average income and long-term capital growth, consistent with reasonable investment risk, and normally invest mainly in equity securities and normally invest at least 80% of its assets in securities of companies principally engaged in the real estate industry and other real estate related investments.
FSMO is managed by Michelle Hoerber and will seek long-term growth of capital and normally invest primarily in equity securities and normally invest at least 80% of its assets in securities of companies with small to medium market capitalizations (which, for the purposes of this fund, are companies with market capitalizations similar to companies in the Russell 2500 Index).
Active ETFs’ Approach
Fidelity’s active equity ETFs “will employ an innovative tracking basket methodology” that it said “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.”
Fidelity “will continue to look for opportunities to help meet client needs in this space,” according to Greg Friedman, Fidelity’s Head of ETF Management and Strategy.
The company is “committed to this new and growing chapter in the ETF space as investors seek actively managed investment capabilities as well as the tax efficiency, trading flexibility and potential cost efficiency benefits of ETF vehicles,” he said in the announcement.
“These active equity ETFs help bring proven Fidelity capabilities, including our heritage of active management and skilled portfolio managers, to an ETF wrapper.”
After the lasts four funds list, Fidelity’s ETF lineup will include seven actively managed equity ETFs, three actively managed bond ETFs, 15 factor ETFs, 11 passive equity sector ETFs and Fidelity ONEQ, all competitively priced and available for purchase commission–free on Fidelity’s ETF platform, it noted.
The company now has more than $668 billion in ETF client assets and its platform offers individual investors and advisors access to more than 2,000 ETFs, commission-free, according to the brokerage firm.
— Check out State Street to Liquidate 10 ETFs: Portfolio Products on ThinkAdvisor.