BOSTON--(BUSINESS WIRE)--Fidelity Investments®, one of the industry’s leading providers of exchange traded funds (ETFs) with more than $300 billion in ETF assets under administration,2 today announced it is expanding its factor-based ETF offerings for individual investors and financial advisors with the introduction of two international factor-based ETFs: Fidelity International High Dividend ETF (FIDI) and Fidelity International Value Factor ETF (FIVA).
The new ETFs, which began trading on the New York Stock Exchange today, are competitively priced with total expense ratios of just 0.39%. They are available to individual investors and financial advisors commission-free3 through Fidelity’s online brokerage platforms.
“Many investors have expressed strong interest in international dividend and value factor strategies,” said Greg Friedman, head of ETF management and strategy at Fidelity. “These new ETFs, which will help us address that demand, benefit from our powerful research capabilities and decades of investing experience and expertise and provides great value to investors.”
With the addition of these two ETFs, investors now have access to 93 commission-free ETFs, including the full suite of eight domestic and international factor ETFs, three Fidelity actively-managed bond ETFs, 11 Fidelity passive equity sector ETFs, Fidelity ONEQ, and 70 passive iShares ETFs. Fidelity’s commission-free ETF lineup continues to see tremendous asset growth, reaching $106 billion in AUA.4
“Overall cost is a key consideration when evaluating ETFs. Commissions, bid-ask spreads, and expense ratios are three important factors in evaluating overall ETF cost,” says Friedman. “Our commission-free ETFs provide customers with tighter spreads and lower expense ratios, compared to the average commission-free ETFs.”
Fidelity International Factor-based ETFs Investment Objectives and Index Definitions
- Fidelity International High Dividend ETF (FIDI) will seek to provide investment results that correspond to the total return of dividend-paying stocks, as represented by the Fidelity International High Dividend Index. The Fidelity International High Dividend Index is designed to reflect the performance of international high dividend-paying stocks that are expected to continue to pay and grow their dividends. The index consists of stocks of companies with high dividend yields, low dividend payout ratios and high dividend growth.
- Fidelity International Value Factor ETF (FIVA) will seek to provide investment results that correspond to the total return of international stocks exhibiting value characteristics, as represented by the Fidelity International Value Factor Index. The Fidelity International Value Factor Index is designed to reflect the performance of international stocks that have attractive valuations. The index consists of stocks of companies with high free-cash-flow yield, low enterprise value to EBITDA (earnings before interest, taxes, depreciation and amortization), low price to tangible book value and low price to future earnings.
New ETFs Complement Fidelity’s International Investment Capabilities
With $69 billion in net inflows industrywide over the past 5 year(s), international factor-based ETFs now represent an approximately $99 billion market. “Dividend ETFs are one of the largest categories of international smart beta assets,” said Friedman. “While value strategies are among the most popular of U.S.-focused factor or “smart beta” ETFs, internationally-focused factor strategies are still few and far between.”
These new ETFs build on and complement Fidelity’s broader international investment capabilities, including Fidelity’s actively-managed mutual funds that target factors like international growth, and may be attractive to investors looking for similar offerings in an ETF.
Fidelity Provides Additional Factor and ETF Educational Resources
To help investors and advisors learn more about how international factor strategies may complement existing portfolios, Fidelity has published a new research paper, “Translating Factors in International Markets.” Other Fidelity research on factor investing include “An Overview of Factor Investing” and “Putting Factors to Work.”
Fidelity’s customers can find in-depth investment insights, research, education and a highly customizable screener for finding ETFs and other exchange traded products (ETPs) at the ETF landing zone (www.fidelity.com/etfs) on Fidelity.com.
About Fidelity Investments
Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $6.7 trillion, including managed assets of $2.4 trillion as of November 30, 2017, we focus on meeting the unique needs of a diverse set of customers: helping more than 26 million people invest their own life savings, 23,000 businesses manage employee benefit programs, as well as providing more than 12,500 financial advisory firms with investment and technology solutions to invest their own clients’ money. Privately held for 70 years, Fidelity employs more than 40,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.
Before investing, consider the exchange traded funds’ investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks. The securities of smaller, less well-known companies can be more volatile than those of larger companies. There is no guarantee that a factor-based investing strategy will enhance performance or reduce risk. Before investing, make sure you understand how the fund’s factor investment strategy may differ from more traditional index products. Depending on market conditions, fund performance may underperform compared to products that seek to track a more traditional index. The return of an index ETF is usually different from that of the index it tracks because of fees, expenses and tracking error. An ETF may trade at a premium or discount to its Net Asset Value (NAV).
The Fidelity International High Dividend ETF seeks to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity International High Dividend IndexSM. Normally investing at least 80% of assets in securities included in the Fidelity International High Dividend Index, which is designed to reflect the performance of large and mid-capitalization developed international high dividend-paying stocks that are expected to continue to pay and grow their dividends.
The Fidelity International Factor ETF seeks to provide investment returns that correspond, before fees and expenses, generally to the performance of the Fidelity International Value Factor IndexSM. Normally investing at least 80% of assets in securities included in the Fidelity International Value Factor Index, which is designed to reflect the performance of large and mid-capitalization developed international stocks that have attractive valuations
ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. 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.
Beta is a measure of risk. It represents how a security has responded in the past to movements of the securities market. Smart beta represents an alternative investment methodology to typical cap-weighted benchmark investing and there is no guarantee that a smart beta or factor-based investing strategy will enhance performance or reduce risk.
The indices were created by FMRCo., Inc. using a rules-based proprietary index methodology and the performance of the funds and their indices may vary somewhat due to various factors including fees and expenses. You cannot invest directly in an index.
There is no guarantee that a factor-based investing strategy will enhance performance or reduce risk. Before investing, make sure you understand how a factor investment strategy may differ from more traditional index based approach. Depending on market conditions, factor based investments may underperform compared to investments that seek to track a market-capitalization weighted index.
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.
It is not possible to invest directly in an index.
For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive, long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Additional information about the sources, amounts, and terms of compensation is described in the ETF’s prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates. The 70 iShares commission-free ETFs offer is for online customers who open an account with a minimum balance of $2,500.
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Fidelity Investments Institutional Services Company, Inc.,
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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.
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1 Free commission offer applies to online purchases of select
iShares ETFs in a Fidelity account. Fidelity accounts may require minimum
balances. The sale of ETFs is subject to an activity assessment fee
(from $0.01 to $0.03 per $1,000 of principal). iShares ETFs are subject
to a short-term trading fee by Fidelity if held less than 30 days.
2 As of December 31, 2017.
3 Free commission offer applies to online purchases of select iShares ETFs in a Fidelity account. Fidelity accounts may require minimum balances. The sale of ETFs is subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). iShares ETFs are subject to a short-term trading fee by Fidelity if held less than 30 days.
4 As of November 2017.