Mutual fund giant Fidelity Investments is taking its ETF game
up a notch.
This time it's leveraging the investment capabilities it's
best known for: active fixed-income management.
The Massachusetts-based company on Thursday launched its first
suite of actively managed bond
:Fidelity Total Bond (
),Fidelity Limited Term Bond (
) andFidelity Corporate Bond (
"These funds essentially cover the entire duration spectrum of
the investment-grade market," said Bob Brown, president of
Fidelity's bond division.
The new ETFs complement three Fidelity active fixed-income
mutual funds. They will share the same management teams as their
similarly named mutual fund counterparts.
"We've taken our distribution platform, investment expertise
and performance together and put it into an ETF offering," Brown
said in a phone interview with IBD.
That ETF wrapper means
get the added benefits of intraday liquidity, holdings
transparency and ability to short and use options, he added.
Backed by experienced portfolio managers, "our new (actively
managed) funds also offer investors and advisers the potential to
outperform an index," while providing risk-adjusted returns,
FBND, described as "a true, core fixed-income strategy," takes
on the largest actively managed fixed-income bond ETF -- the $2.8
billionPimco Total Return (
), managed until recently by bond king Bill Gross. Is Fidelity
horning in on
Pimco's recent troubles
? Maybe not: It first filed plans to launch these new ETFs with
the Securities and Exchange Commission in early 2013.
Actively managed ETFs hold $17 billion in assets, or roughly
1% of total ETF assets. But the space, Brown noted, "has a lot of
growth opportunity," especially with fixed income comprising
approximately 73% of actively managed ETFs.
Fidelity's actively managed ETF offerings are debuting almost
exactly a year after the firm launched 10 passively managed
sector ETFs. Those funds crossed the $1 billion mark in
near-record time -- about eight months.
The expense ratio on each new ETF is 0.45%. They can be traded
commission-free through a Fidelity
New ProShares ETF
Also new to the trading floor Thursday:ProShares Morningstar
Alternatives Solution ETF (
ProShares, a leading provider of alternative ETFs, says ALTS
provides a broad range of alternative strategies. When added to a
traditional stock and bond portfolio, it aims to enhance
ALTS is an ETF of ETFs. It tracks a Morningstar index covering
strategies that include hedge fund replication, long-short
equity, merger arbitrage, managed futures and private equity.
ProShares launched in 2006 and offers more than 140