Fidelity clients now have access to 95 ETFs without commissions
June 14, 2018 – Fidelity
BOSTON — Fidelity Investments, one of the industry’s leading providers of exchange traded funds (ETFs) with more than $380 billion in ETF assets under administration,2 today announced an expansion of its ETF lineup with the introduction of two factor ETFs: Fidelity Low Duration Bond Factor ETF (FLDR) and Fidelity High Yield Factor ETF (FDHY).
The new ETFs are competitively priced with total expense ratios of just 0.15% for FLDR and 0.45% for FDHY. Both ETFs began trading today, the Fidelity Low Duration Bond Factor ETF on the CBOE BZX Exchange, Inc. and Fidelity High Yield Factor ETF on the New York Stock Exchange. They are available to individual investors and financial advisors commission-free3 through Fidelity’s online brokerage platforms. These new fixed income and high income factor ETFs apply Fidelity’s quantitative analysis and proprietary risk management to seek sources of income to help drive better portfolio outcomes. Fidelity currently manages more than $1.13 trillion in fixed income and high income assets backed by more than 261 investment professionals worldwide.4
“With a quantitative, rules-based methodology at its core and an active liquidity overlay, Fidelity High Yield Factor ETF leverages our extensive high income capabilities to offer an enhanced exposure to the high yield market for ETF investors,” said Greg Friedman, head of ETF management and strategy at Fidelity. “Fidelity Low Duration Bond Factor ETF is unique in its category because it seeks a balance between credit risk and interest rate risk, on top of pursuing higher income potential than a money market with lower volatility than a short-term bond fund.”
With the addition of these two ETFs, investors now have access to 95 commission-free3 ETFs, including the full suite of 10 factor ETFs, three Fidelity actively-managed bond ETFs, 11 Fidelity passive equity sector ETFs, Fidelity ONEQ, and 70 passive iShares ETFs. Fidelity’s commission-free3 ETF lineup continues to see tremendous asset growth, with $111 billion in AUA.5
Fidelity’s New Fixed Income ETFs: Investment Objectives and Index Definitions
- Fidelity High Yield Factor ETF (FDHY) seeks to provide a high level of income and may also seek capital appreciation by normally investing at least 80% of its assets in debt securities rated below investment grade. In buying and selling securities, the fund uses a proprietary multifactor quantitative model to systematically screen over 1,000 bonds and select those with strong return potential and low probability of default using a value and quality factor-based methodology. The fund uses the ICE BofAML BB-B US High Yield Constrained Index 6 as a guide in structuring the fund and selecting its investments as it relates to credit quality distribution and risk characteristics. The fund also employs active security selection to optimize trading and reduce transaction costs.
- Fidelity Low Duration Bond Factor ETF (FLDR) will seek to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity Low Duration Investment Grade Factor Index. The fund will normally invest at least 80% of its assets in securities included in the index. The Fidelity Low Duration Investment Grade Factor Index , which is comprised of U.S. investment grade floating rate notes with less than 5 years maturity and U.S. Treasury notes with 7 to 10 years maturity, is designed to optimize the balance of interest rate risk and credit risk, such that both returns and risk measures may be improved relative to traditional U.S. investment grade floating rate note indices.