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Fidelity to Offer Exchange-Traded Fund

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May 29, 2003 — Mutual fund giant Fidelity Investments plans to offer its first exchange-traded fund, as well as a mutual fund, that are both designed to track the Nasdaq Composite Index.

The exchange-traded offering, the Fidelity Composite Index Tracking Stock, would seek to mimic the performance of the index, which is made up of about 3,600 companies. Fidelity disclosed its plans in a regulatory filing this week.

Unlike the Nasdaq-100 Index Trading Stock (QQQ), which tracks a smaller segment of the index, ex-financial Nasdaq stocks, the Fidelity offering seeks to track the full Nasdaq Composite Index.

Exchange-traded funds trade throughout the day, unlike shares of conventional mutual funds, which are priced only once a day. Fidelity’s Nasdaq ETF will carry an expense ratio of 0.30%, according to the filing.