New Thematic ETFs Track Fidelity Indices, Developed by Quantitative Research and Investment Division
Fidelity Expands Market Insights Podcast Series with New Quantitative Research Insights
BOSTON--(BUSINESS WIRE)-- Fidelity Investments® today announced the launch of four new thematic exchange-traded funds (ETFs) -- Fidelity Clean Energy ETF (FRNW), Fidelity Cloud Computing ETF (FCLD), Fidelity Digital Health ETF (FDHT), and Fidelity Electric Vehicles and Future Transportation ETF (FDRV). The ETFs began trading today on the Cboe BZX Exchange, Inc. and are available commission-free for individual investors and financial advisors through Fidelity’s online brokerage platforms.
Fidelity is one of the industry’s leading distributors of ETFs with more than $859 billion in ETF client assets under administration.i With this launch, Fidelity now offers 46 ETFs with more than $30.6 billion in assets under management.ii Through Fidelity’s industry-leading platforms, individual investors and advisors have access to more than 2,000 ETFs, commission-free. Fidelity also offers investors educational resources and a powerful ETF screener here.
According to Morningstar, assets under management in thematic funds have more than tripled in three years through March 2021, reaching $595 billion globally.iii
“Thematic investing is a significant growth area as investors increasingly look for opportunities to enhance their portfolios and align their investments with their values and personal passions,” said Greg Friedman, Fidelity’s Head of ETF Management and Strategy. “We continue to look for ways to leverage our investment expertise and investor insights to offer a wide array of innovative ETFs.”
The four passively managed, self-indexed ETFs utilize Fidelity’s quantitative capabilities, including its proprietary indices.
“Fidelity’s quantitative team harnesses the scale, technology, and decades of data and analysis to help strengthen our investment processes, and, ultimately, help meet our customers’ evolving needs,” said Denise Chisholm, Fidelity’s Director of Quantitative Market Strategy. “In addition to sector and factor investments, thematic investments can serve as another tool for investors that are increasingly looking for differentiated investment options to help meet their distinct financial goals.”
Fidelity’s Growing Quantitative Capabilities
Fidelity’s quantitative research and investment team developed a rules-based methodology for these four new thematic indices, which uses a combination of company revenue data and natural language processing (NLP) to identify the companies in each index. Additional quality screens are used to help mitigate individual security risk within each index.
To share insights from Fidelity’s quantitative research and investments team with investors and advisors, Denise Chisholm will join Fidelity’s expanded Market Insights podcast series, launching later this month. Tune in for two episodes per month with Fidelity speakers who will analyze the latest trends in the markets and global economy.
Fidelity’s Expanding Thematic Lineup
Fidelity is an industry leader in thematic investing, now offering 33 mutual funds and ETFs that cover a range of thematic categories, including, megatrends, sustainability, outcome-oriented, differentiated insights and disruption. The disruptive mutual funds include time-based pricing which provides lower expense ratios for shareholders who invest in one of the disruptive mutual funds through a Fidelity retail account and remain in the fund for extended periods.
Principal Investment Strategies for Fidelity’s Four New Thematic ETFs
- Fidelity Clean Energy ETF (FRNW) normally invests at least 80% of its assets in securities included in the Fidelity Clean Energy Index℠ and in depositary receipts representing securities included in the index. The Fidelity Clean Energy Index℠ is designed to reflect the performance of a global universe of companies across the market capitalization spectrum that distribute, produce or provide technology or equipment to support the production of energy from solar, wind, hydrogen and other renewable sources.
- Fidelity Cloud Computing ETF (FCLD) normally invests at least 80% of its assets in securities included in the Fidelity Cloud Computing Index℠ and in depositary receipts representing securities included in the index. The Fidelity Cloud Computing Index℠ is designed to reflect the performance of a global universe of companies across the market capitalization spectrum that provide products or services enabling the increased adoption of cloud computing, characterized by the delivery of computing services over the internet.
- Fidelity Digital Health ETF (FDHT) normally invests at least 80% of its assets in securities included in the Fidelity Digital Health Index℠ and in depositary receipts representing securities included in the index. The Fidelity Digital Health Index℠ is designed to reflect the performance of a global universe of companies across the market capitalization spectrum providing healthcare records management, connected healthcare devices, surgical robotics, telemedicine, and other technology-enabled healthcare products and services.
- Fidelity Electric Vehicles and Future Transportation ETF (FDRV) normally invests at least 80% of its assets in securities included in the Fidelity Electric Vehicles and Future Transportation Index℠ and in depositary receipts representing securities included in the index. The Fidelity Electric Vehicles and Future Transportation Index℠ is designed to reflect the performance of a global universe of companies across the market capitalization spectrum engaged in the production of electric and/or autonomous vehicles and their components, technology, or energy systems or engaged in other initiatives that aim to change the future of transportation.
About Fidelity Investments
Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $11.2 trillion, including discretionary assets of $4.2 trillion as of July 31, 2021, we focus on meeting the unique needs of a diverse set of customers: helping more than 38 million people invest their own life savings, 22,000 businesses manage employee benefit programs, as well as providing more than 13,500 wealth management firms and institutions with investment and technology solutions to drive growth. Privately held for 75 years, Fidelity employs more than 52,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about-fidelity/our-company.
Free commission offer applies to online purchases of Fidelity ETFs in a Fidelity retail account. The sale of ETFs is subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal).
ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs have management fees and other expenses. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.
Exchange-traded products (ETPs) are subject to market volatility and the risks of their underlying securities, which may include the risks associated with investing in smaller companies, foreign securities, commodities, and fixed income investments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. ETPs that target a small universe of securities, such as a specific region or market sector, are generally subject to greater market volatility, as well as to the specific risks associated with that sector, region, or other focus. ETPs that use derivatives, leverage, or complex investment strategies are subject to additional risks. The return of an index ETP is usually different from that of the index it tracks because of fees, expenses, and tracking error. An ETP may trade at a premium or discount to its net asset value (NAV) (or indicative value in the case of exchange-traded notes). The degree of liquidity can vary significantly from one ETP to another and losses may be magnified if no liquid market exists for the ETP's shares when attempting to sell them. Each ETP has a unique risk profile, detailed in its prospectus, offering circular, or similar material, which should be considered carefully when making investment decisions.
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Past performance is no guarantee of future results.
Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Investing in stock involves risks, including the loss of principal.
Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.
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Before investing, consider the exchange traded funds’ investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
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i Fidelity Investments, as of August 31, 2021
ii Fidelity Investments, as of September 30, 2021
iii AUM as of March 2021; Morningstar, “Global Thematic Funds Landscape”, May 2021
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Caroline St. Angelo
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Source: Fidelity Investments