Fidelity Expands Suite Of Innovative Active Equity ETFs With Four New Funds

-          Fidelity’s ETFs Continue to Gather Assets, Reaching More Than $24 Billioni
-          All Fidelity and Non-Fidelity ETFs Are Available to Purchase Commission-Free on Fidelity’s Industry-Leading Retail and Institutional Online Brokerage Platforms

BOSTON, February 1, 2021 -- Fidelity Investments today announced the launch of four new active equity exchange-traded funds (ETFs), which will be available on or about February 4, 2021, using its innovative proprietary structure. The four ETFs, which will be actively managed by Fidelity’s experienced portfolio managers and research teams, will be available to purchase commission-free for individual investors and financial advisors through Fidelity’s online brokerage platforms. The new active equity ETFs will be competitively priced with total expense ratios of 0.59%-0.64%. With this launch, Fidelity will offer 37 ETFs in its lineup -- including active equity and bond ETFs, factor ETFs, and sector ETFs -- with more than $24 billion in assetsii.

“Our goal is to offer investors unmatched overall value by providing them with a range of products to help meet their varied needs,” said Greg Friedman, Fidelity’s Head of ETF Management and Strategy. “Fidelity is committed to this new and growing chapter in the ETF space as investors seek actively-managed investment capabilities as well as the tax efficiency, trading flexibility and potential cost efficiency benefits of ETF vehicles. These active equity ETFs help bring proven Fidelity capabilities, including our heritage of active management and skilled portfolio managers, to an ETF wrapper.” 

The four new active equity ETFs and their portfolio managers will be: Fidelity Growth Opportunities ETF1 (managed by Kyle Weaver); Fidelity Magellan ETF1 (managed by Sammy Simnegar); Fidelity Real Estate Investment ETF1 (managed by Steve Buller); and Fidelity Small-Mid Cap Opportunities ETF1 (managed by Michelle Hoerber). The first three will have total expense ratios of 0.59% and utilize the same portfolio managers and research teams as their like-named mutual funds; the Fidelity Small-Mid Cap Opportunities ETF will have an expense ratio of 0.64% and utilize a new quantitative approach that extracts fundamental insights from Fidelity’s experienced small-cap, mid-cap, growth and value investment teams. 

1 These ETFs are different from traditional ETFs.

Traditional ETFs tell the public what assets they hold each day. These ETFs will not. This may create additional risks for your investment. For example:

•          You may have to pay more money to trade the shares of these ETFs. These ETFs will provide less information to traders, who tend to charge more for trades when they have less information.

•          The price you pay to buy ETF shares on an exchange may not match the value of each ETF’s portfolio. The same is true when you sell shares. These price differences may be greater for these ETFs compared to other ETFs because they provide less information to traders.

•          These additional risks may be even greater in bad or uncertain market conditions.

•          Each ETF will publish on Fidelity.com and i.Fidelity.com a “Tracking Basket” designed to help trading in shares of the ETF. While the Tracking Basket includes some of the ETF’s holdings, it is not the ETF’s actual portfolio.

The differences between these ETFs and other ETFs may also have some advantages. By keeping certain information about the ETFs secret, they may face less risk that other traders can predict or copy their investment strategy. This may improve the ETFs’ performance. However, if the investment strategy can be predicted or copied, this may hurt the ETFs’ performance. For additional information regarding the unique attributes and risks of these ETFs, see each ETF’s prospectus.

Fidelity’s active equity ETFs will employ an innovative tracking basket methodology, which maintains the benefits of the ETF structure, provides information to market participants to promote efficient trading of shares, and preserves the ability to add value through active management. The active equity ETFs will begin trading on or about February 4, 2021 on the Cboe BZX Exchange, Inc. 

In June 2020, Fidelity launched its first suite of active equity ETFs: Fidelity Blue Chip Growth ETF (FBCG) 2, Fidelity Blue Chip Value ETF (FBCV) 2, and Fidelity New Millennium ETF (FMIL) 2. Fidelity’s ETF lineup will include seven actively-managed equity ETFs, three actively-managed bond ETFs, 15 factor ETFs, 11 passive equity sector ETFs and Fidelity ONEQ, all competitively priced and available for purchase commission–free on Fidelity’s ETF platform. As a leading provider of ETFs with more than $668 billion in ETF client assetsiii, Fidelity’s platform offers individual investors and advisors access to more than 2,000 ETFs, commission-free.

2 See disclosure in footnote 1 above.

“We are excited to grow our lineup of active equity ETFs in 2021 after launching our first suite and innovative methodology in 2020 and will continue to look for opportunities to help meet client needs in this space,” said Friedman.

Fidelity’s New Active Equity ETFs: Principal Investment Strategies

•          Fidelity Growth Opportunities ETF3 (FGRO) will seek long-term growth of capital. The fund will normally invest primarily in equity securities of companies that Fidelity Management & Research Company LLC (FMR) believes have above-average growth potential.

•          Fidelity Magellan ETF3 (FMAG) will seek long-term growth of capital. The fund will normally invest primarily in equity securities of companies that are either “growth” stocks or “value” stocks or both.

•          Fidelity Real Estate Investment ETF3 (FPRO) will seek above-average income and long-term capital growth, consistent with reasonable investment risk. The fund will normally invest primarily in equity securities and normally invest at least 80% of its assets in securities of companies principally engaged in the real estate industry and other real estate related investments.

•          Fidelity Small-Mid Cap Opportunities ETF3 (FSMO) will seek long-term growth of capital. The fund will normally invest primarily in equity securities and normally invest at least 80% of its assets in securities of companies with small to medium market capitalizations (which, for purposes of this fund, are those companies with market capitalizations similar to companies in the Russell 2500® Index).

3 See disclosure in footnote 1 above.

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 $9.8 trillion, including discretionary assets of $3.8 trillion as of December 31, 2020, we focus on meeting the unique needs of a diverse set of customers: helping more than 35 million people invest their own life savings, 22,000 businesses manage employee benefit programs, as well as providing more than 13,500 institutions with investment and technology solutions to invest their own clients’ money. Privately held for more than 70 years, Fidelity employs more than 47,000 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.