One of the industry’s largest ETF issuers, Fidelity Investments, is preparing to bring six brand new ETFs to market next week.
The six new funds are as follows:
Fidelity Core Dividend ETF (NYSE:FDVV) will seek to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity Core Dividend Index. The Fidelity Core Dividend Index is designed to reflect the performance of stocks of large- and mid-cap dividend-paying companies that are expected to continue to pay and grow their dividends. The index consists of stocks of companies with historically high dividend yields, low dividend payout ratios and high dividend growth.
Fidelity Dividend ETF for Rising Rates (FDRR) will seek to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity Dividend Index for Rising Rates. The Fidelity Dividend Index for Rising Rates is designed to reflect the performance of stocks of large- and mid-cap dividend-paying companies that are expected to continue to pay and grow their dividends and have a positive correlation of returns to increasing 10-year U.S. Treasury yields. The index consists of stocks of companies with historically high dividend yields, low dividend payout ratios, high dividend growth, and a positive correlation of returns to increasing 10-year U.S. Treasury bond yields.
Fidelity Low Volatility Factor ETF (FDLO) will seek to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity U.S. Low Volatility Factor Index. The Fidelity U.S. Low Volatility Factor Index is designed to reflect the performance of stocks of large- and mid-cap U.S. companies with lower volatility than the broader market. The index consists of stocks of companies with historically low volatility of returns, low beta (a measure of market sensitivity) and low earnings volatility.
Fidelity Momentum Factor ETF (FDMO) will seek to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity U.S. Momentum Factor Index. The Fidelity U.S. Momentum Factor Index is designed to reflect the performance of stocks of large- and mid-cap U.S. companies exhibiting positive momentum signals. The index consists of stocks of companies with historically high total and volatility-adjusted returns, high positive earnings surprises and low average short interest.
Fidelity Quality Factor ETF (FQAL) will seek to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity U.S. Quality Factor Index. The Fidelity U.S. Quality Factor Index is designed to reflect the performance of stocks of large- and mid-cap U.S. companies with a higher quality profile than the broader market. The index consists of stocks of companies with historically high free–cash-flow margins, high returns on invested capital and high-free-cash flow stability.
Fidelity Value Factor ETF (FVAL) will seek to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity U.S. Value Factor Index. The Fidelity U.S. Value Factor Index is designed to reflect the performance of stocks of large- and mid-cap U.S. companies that have attractive valuations. The index consists of stocks of companies with historically high free-cash-flow yields, low enterprise value to EBITDA (earnings before interest, taxes, depreciation and amortization), low price to tangible book value and low price to future earnings.
All of Fidelity’s new funds will trade on the NYSE beginning on or around Thursday, September 15, 2016. From the press release:
“Fidelity has been executing on its ETF strategy for some time, and our success can be seen in the one quarter of a trillion dollars in ETF assets under administration that customers have entrusted to us, representing about 11% of all U.S.-domiciled ETF assets,” said Anthony Rochte, president of SelectCo, the company’s dedicated sector investing and ETF services division. “Launching the six factor-based ETFs reinforces our commitment to expanding Fidelity’s ETF investment manufacturing capabilities, while delivering an exceptional customer experience that is centered on providing choice, value and expertise.”
We’ll be sure to follow up on these funds in coming weeks as they begin to gather assets and get some trading history under their belts. Fidelity currently boasts more than $250 billion in assets under management across its suite of ETF offerings.
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