What You Need to Know
- The two new ETFs reflect an increase in actively managed ETF launches from Fidelity and other asset managers.
- Unlike some other recent active ETF launches, these funds fully disclose their holdings on a daily basis.
- Fidelity is
Fidelity Investments has launched two new actively managed ETFs on Thursday: the Fidelity Investment Grade Bond ETF (FIGB) and Fidelity Investment Grade Securitized ETF (FSEC).
Both ETFs are listed on the NYSE Arca and have an expense ratio of 0.36%. Like some other recent Fidelity launches of active ETFs, these two ETFs resemble existing mutual funds and use the same portfolio managers and research teams as those funds. Unlike some other recently launched Fidelity ETFs, however, the two new active bond ETFs are fully transparent, disclosing their holdings daily, rather than with a lag.
Both FIGB and FSEC, like their fund counterparts, seek a high level of current income for investors by normally investing at least 80% of assets in medium and high quality investment-grade debt securities of all types and in repurchase agreements for those securities. FIGB, however, charges nine basis points lower than its mutual fund counterpart.
Comparison can’t be made for FSEC because its mutual fund counterpart, is part of a series available only to certain other Fidelity funds and Fidelity-managed 529 plans, not to individual investors.
Strong Growth in Actively Managed ETFs
Greg Friedman, Fidelity’s head of ETF management and strategy, said in a statement that the firm has seen “strong growth” in its actively managed ETF lineup and is “excited to offer even more choices while delivering excellent value to financial advisors and individual investors.”