Fidelity and Vanguard have added new fixed income ETFs to their exchange-traded fund lineups: Fidelity announced two municipal bond funds Monday, and Vanguard lauched its active Short Duration Bond ETF (VSDB) last week.
Fidelity, citing in-house research showing the number of portfolios using fixed income ETFs grew by 6% in the past year, introduced the Fidelity Municipal Bond Opportunities ETF (FMUB), an actively managed fund, and the Fidelity Systematic Municipal Bond Index ETF (FMUN) — mutual funds that have been converted to ETFs.
The two ETFs generally maintain the same investment strategies as the previous mutual funds.
FMUB, which carries a 0.30% gross expense ratio, and FMUN, with a 0.05% expense ratio, are listed on Nasdaq and available commission-free for individual investors and financial advisors through Fidelity’s online brokerage platforms.
“Reinforcing Fidelity's commitment to providing clients with investment choice, we are launching our first municipal bond ETFs and building upon our decade-long presence in the Fixed Income ETF space,” Greg Friedman, head of Fidelity ETF management and strategy, said. “These new offerings aim to meet client demand in the municipal bond market and provide investors with superior value, powered by our legacy of fundamental and quantitative research capabilities."
FMUB's portfolio management team includes co-managers Cormac Cullen, Michael Maka and Elizah McLaughlin, and FMUN's includes Brandon Bettencourt and Mark Lande.
The new ETFs add roughly $229 million in assets to Fidelity's 78-fund fixed income ETF lineup.
The Vanguard Short Duration Bond ETF, an active fixed income fund, is designed to provide clients with current income and lower price volatility consistent with short-duration bonds, the asset manager said.
Its 0.15% expense ratio matches the lowest in the category, and the fund is managed by Arvind Narayanan and Thanh Nguyen, Vanguard said.
“The addition of Vanguard Short Duration Bond ETF reaffirms our commitment to meeting the evolving needs of investors who are increasingly seeking active bond solutions through an ETF wrapper,” said Sara Devereux, global head of Vanguard Fixed Income Group.
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