Fidelity's Enhanced High Yield ETF (FDHY) recently reduced its expense ratio from 45 to 35 basis points, making it one of the most cost-effective active high-yield bond ETFs among the top 10 in its category.
This reduction is projected to save shareholders approximately $331,000 annually, highlighting the importance of expense ratios in maximizing investor returns. Unlike passive strategies that track high-yield bond indexes, FDHY employs a quantitative, rules-based approach, screening for bonds with strong return potential and low default risks.
This active methodology allows the fund to exploit market inefficiencies, providing a potential edge over passive competitors. Since the expense cut in October, the fund has attracted over $24 million in net flows, demonstrating increased investor interest.
Finsum: Keeping an eye on fees, particularly for active funds can really advance returns in a macro environment.
- low cost
- ETFs
- fixed income etfs
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