Fidelity Investments said Thursday it is expanding its lineup of exchange-traded funds for individual investors and advisors by launching six new factor-based ETFs.
Fidelity’s new suite of factor-based ETFs, which begin trading on the New York Stock Exchange on or about Sept. 15, are:
• Fidelity Core Dividend ETF (FDVV), designed to reflect the stock performance of large- and mid-cap dividend-paying companies that are expected to continue to pay and grow their dividends.
• Fidelity Dividend ETF for Rising Rates (FDRR), designed to reflect the stock performance of large- and mid-cap dividend-paying companies that are expected to continue to pay and grow their dividends and have a positive correlation of returns to increasing 10-year U.S. Treasury yields.
• Fidelity Low Volatility Factor ETF (FDLO), designed to reflect the stock performance of large- and mid-cap U.S. companies with lower volatility than the broader market.
• Fidelity Momentum Factor ETF (FDMO), designed to reflect the stock performance of large- and mid-cap U.S. companies exhibiting positive momentum signals.
• Fidelity Quality Factor ETF (FQAL), designed to reflect the stock performance of large- and mid-cap U.S. companies with a higher quality profile than the broader market.
• Fidelity Value Factor ETF (FVAL), designed to reflect the stock performance of large- and mid-cap U.S. companies that have attractive valuations.
Fidelity, which currently has more than $250 billion in ETF assets under administration, said each of the new ETFs will be competitively priced with total expense ratios of just 0.29%. Individual investors and advisors will also be able to purchase each of the new ETFs commission-free online through one of Fidelity’s brokerage platforms.
“Fidelity has been executing on its ETF strategy for some time, and our success can be seen in the one quarter of a trillion dollars in ETF assets under administration that customers have entrusted to us, representing about 11% of all U.S.-domiciled ETF assets,” said Anthony Rochte, president of SelectCo, the Boston-based company’s dedicated sector investing and ETF services division, in a statement.
“Launching the six factor-based ETFs reinforces our commitment to expanding Fidelity’s ETF investment manufacturing capabilities, while delivering an exceptional customer experience that is centered on providing choice, value and expertise,” Rochte added.
Once the six new factor-based ETFs are launched, customers will have access to 91 commission-free ETFs, including three Fidelity actively managed bond ETFs, 11 Fidelity passive equity sector ETFs, Fidelity ONEQ, and 70 passive iShares ETFs, the company said.
“Factor-based investing is one of the fastest growing areas of the ETF industry and an area where we believe our proven research capabilities and experience can add value for our customers,” said Joe DeSantis, chief investment officer in Fidelity’s Equity division.
“For nearly a decade, Fidelity’s quantitative research team has been working collaboratively with our portfolio managers and fundamental analysts to develop factor models that incorporate what we believe are the best stock drivers from both fundamental and quantitative perspectives,” DeSantis said. “We are now making this expertise available directly to our customers through our new ETFs. ”
With more than $250 billion in net inflows over the past five years, factor-based or “smart beta” ETFs now represent approximately $487 billion of the $2.3 trillion U.S. ETF market.
Of the more than $250 billion in ETF assets under administration on Fidelity’s platform, approximately $62 billion are in factor-based ETFs, DeSantis said.
— Related on ThinkAdvisor: