Fidelity Investments® Passive Sector ETFs Surpass $1 Billion in Assets
Individual Investors and Advisors Drive Growth of Industry’s Lowest-Cost Sector ETFsi; Company Expands Suite of Sector Investment Insights
BOSTON--(BUSINESS WIRE)--Fidelity Investments®, a leading global asset manager and pioneer in sector investing, today announced its 10 passively managed sector exchange-traded funds (ETFs) have surpassed $1 billion in managed assets since trading began eight months ago.
“Surpassing the $1 billion milestone in such a short period of time clearly demonstrates the growing demand for sector investments”
A significant portion of Fidelity’s asset growth occurred in the past three months with individuals and advisors investing more than $500 million in the ETFs. In addition, six of the 10 ETFs have each accumulated more than $100 million in assets under management, including the largest -- Fidelity MSCI Health Care Index ETF (FHLC) -- at $172 million.1
Fidelity’s U.S. sector stock ETFs, which continue to offer the industry’s lowest total expense ratio at 0.12 percenti, are available to individual investors and registered investment advisors (RIAs) to buy commission free online* through one of Fidelity’s brokerage platforms.
“As investment advisors, we’re looking to provide our clients with solutions that help diversify portfolios and are cost-effective,” said David Haviland, portfolio manager at Beaumont Capital Management. “Sector investing is an effective and targeted approach that we frequently use to gain exposure to specific segments of the economy – whether it is for growth or to manage portfolio risk. With Fidelity’s deep sector heritage and the low-cost sector ETFs, it was clear these solutions would deliver value to our clients.”
“Surpassing the $1 billion milestone in such a short period of time clearly demonstrates the growing demand for sector investments,” said Anthony Rochte, president of SelectCo, Fidelity’s dedicated sector investing division. “We expect interest in sector investing, whether through our ETFs or our 44 actively managed sector mutual funds, to continue as individual investors and advisors seek to diversify their portfolios and use sectors as building blocks to help generate potential alpha and manage portfolio risk.”
As part of its broader strategic relationship, Fidelity, which has $2 trillion in managed assets, uses BlackRock as the sub-advisor for its 10 passive sector ETFs, leveraging the firm’s passive investment management expertise and scale.
With more than 30 years of global sector investing experience, Fidelity also offers 44 actively managed sector mutual funds with $71 billion2 in assets, up nearly 39% from one year ago. This is the industry’s largest lineup of sector mutual funds.
Expanded Sector Investing Education and Tools
Fidelity also expanded its extensive suite of in-depth sector research and market commentary for investors and advisors on dedicated micro sites on fidelity.com and advisor.fidelity.com, with the launch of Fidelity’s Quarterly Sector Update. The new report leverages proprietary research from across Fidelity and provides investors a snapshot of the relative performance potential of the 10 market sectors based on five key factors: relative strength, momentum, relative valuations, fundamentals and business cycle. The Q2 2014 report identifies the technology, industrials and health care sectors as best positioned for investment opportunities.
In addition, Fidelity’s sector research team continues to provide specific analysis on the 10 major equity sectors through its 2014 annual investment outlook and “State of the Sector” series. The most recent papers include State of the Sector: Information Technology, State of the Sector: Telecommunications Services, State of the Sector: Consumer Staples, and State of the Sector: Consumer Discretionary.
“Fidelity’s strategy will continue to be about offering our millions of brokerage customers and thousands of advisor clients a comprehensive suite of investment products and solutions to help them meet their diverse investment needs,” said Rochte. “Our expansive sector capabilities span from the industry-leading sector line up of ETFs and actively managed mutual funds to Fidelity’s sector research and investing tools and are all at the core of helping advisors and individual investors leverage sectors in their portfolios.”
The following chart provides a complete list of Fidelity's passively managed sector ETFs.
Fidelity Passive Sector ETF
Fidelity MSCI Consumer Discretionary Index ETF
MSCI USA IMI Consumer Discretionary Index
Fidelity MSCI Consumer Staples Index ETF
MSCI USA IMI Consumer Staples Index
Fidelity MSCI Energy Index ETF
MSCI USA IMI Energy Index
Fidelity MSCI Financials Index ETF
MSCI USA IMI Financials Index
Fidelity MSCI Health Care Index ETF
MSCI USA IMI Health Care Index
Fidelity MSCI Industrials Index ETF
MSCI USA IMI Industrials Index
Fidelity MSCI Information Technology Index ETF
MSCI USA IMI Information Technology Index
Fidelity MSCI Materials Index ETF
MSCI USA IMI Materials Index
Fidelity MSCI Telecommunication Services Index ETF
MSCI USA IMI Telecommunication Services 25/50 Index3
Fidelity MSCI Utilities Index ETF
MSCI USA IMI Utilities Index
About Fidelity Investments
At Fidelity, our goal is to make financial expertise broadly accessible and effective in helping people live the lives they want. We do this by focusing on a diverse set of customers: from 23 million people investing their own life savings, to 20,000 businesses needing help managing their employee benefit programs to 10,000 advisors and brokers needing technology solutions to invest their own clients’ money. Privately held and with 40,000 employees around the world, Fidelity is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products.
As of May 31, 2014, the company held assets under administration of $4.8 trillion, including managed assets of $2.0 trillion. It is one of the largest mutual fund companies in the United States and the No. 1 provider of both workplace savings plans and Individual Retirement Accounts (IRAs). For more information about Fidelity Investments, visit www.fidelity.com.
ETFs are subject to market fluctuation and the risks of their underlying investments. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.
Because of their narrow focus, sector funds tend to be more volatile than funds that diversify across many sectors and companies.
Fidelity, Fidelity Investments, Fidelity Investments and the pyramid logo, are registered service marks of FMR LLC.
The third party trademarks appearing herein are the property of their respective owners.
The funds or securities referred to herein are not sponsored, endorsed or promoted by MSCI, and MSCI bears no liability with respect to any such funds or securities or any index on which such funds or securities are based. The prospectuses for each of the 10 Fidelity passive sector ETFs contains a more detailed description of the limited relationship MSCI has with Fidelity and any related funds.
Before investing in any mutual fund or exchange traded fund, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.
Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem Street, Smithfield, RI 02917
Fidelity Investments Institutional Services Company, Inc.,
500 Salem Street, Smithfield, RI 02917
Clearing, custody or other brokerage services may be provided by National Financial Services LLC, or Fidelity Brokerage Services LLC. Members NYSE, SIPC. 200 Seaport Blvd, Boston, MA 02210.
© 2014 FMR LLC. All rights reserved.
i Strategic Insight SimFund/FI Desktop, data as of 8/31/2013.
Based on a comparison of total expense ratios for U.S. sector level ETFs
with similar holdings and investment objectives (using the MSCI and S&P
Global Industry Classification System — GICS®) within the universe of
298 ETFs Morningstar has classified as the Sector Stock asset class.
* Free commission offer applies to online purchases of Fidelity ETFs in a Fidelity brokerage account with a minimum opening balance of $2,500. The sale of ETFs is subject to an activity assessment fee (of between $0.01 to $0.03 per $1,000 of principal) and are subject to a short-term trading fee by Fidelity, if held less than 30 days. ETFs are subject to management fees and other expenses.
1 As of July 8, 2014
2 As of June 30, 2014
3 For a fund to qualify as a regulated investment company (RIC) it must comply with the U.S. Internal Revenue Code diversification and income constraints.