Fidelity Investments Expands ETF Offerings With 7 New Mandates
Fidelity’s growing product shelf provides investors with greater optionality for achieving their goals.
Since launching its ETF business in September 2018, Fidelity Investments Canada's (“Fidelity”) ETF assets under management have grown to approximately $4.5 billion (as of December 31, 2023), with $1.3 billion in record net creations in 2023. Attaining such a size and stature requires ongoing product development and yearly enhancements of their ETF line-up. Recently, Fidelity launched a series of new ETF offerings that provide investors with access to alternative strategies and diversified equity exposures with a regional focus; facilitating investors' choice and access to a wide range of investment strategies supported by the global strength and scale of the broader Fidelity Investments organization.
In speaking about the launch of these new solutions, Kelly Creelman, Senior Vice President, Products and Marketing, at Fidelity states “Fidelity continues to broaden its ETF offerings to help meet growing investor demand. By kicking off 2024 with an array of new funds, including alternative strategies, our aim is to provide Canadians new, diversified pathways to invest their savings and achieve their financial goals.”
In this article we’ll look at Fidelity’s recently launched ETF offerings, examining their individual investment objectives and how investors can utilize them.
Fidelity Active ETFs
Fidelity has launched an ETF suite of actively managed fund-of-fund solutions, each with a specific regional focus. Each ETF solution utilizes Fidelity ETFs as the underlying vehicle through which exposure is garnered. With these solutions, investors can again have broad-based geographic equity exposure, with diversified exposure to differing investment factors via the underlying funds. The newly launched funds are:
Fidelity All-American Equity ETF (Ticker: FCAM)
This solution provides exposure to a diversified portfolio of U.S. equity securities by using a strategic equity allocation approach. The underlying Fidelity ETFs that provide this exposure are:
Fidelity U.S. High Quality ETF (25% allocation), Fidelity U.S. Value ETF (25% allocation), Fidelity U.S. Low Volatility ETF (25% allocation), and Fidelity U.S. Momentum ETF (25% allocation).
Fidelity All-Canadian Equity ETF (Ticker: FCCA)
This solution provides exposure to a diversified portfolio of Canadian equity securities by using a strategic equity allocation approach. The underlying Fidelity ETFs that provide this exposure are:
Fidelity Canadian High Quality ETF (25% allocation), Fidelity Canadian Value ETF (25% allocation), Fidelity Canadian Low Volatility ETF (25% allocation), and Fidelity Canadian Momentum ETF (25% allocation).
Fidelity All-International Equity ETF (Ticker: FCIN)
This solution provides exposure to a diversified portfolio of international equity securities by using a strategic equity allocation approach. The underlying Fidelity ETFs that provide this exposure are:
Fidelity International High Quality ETF (25% allocation), Fidelity International Value ETF (25% allocation), Fidelity International Low Volatility ETF (25% allocation), and Fidelity International Momentum ETF (25% allocation).
Fidelity Alternative ETFs
Alternative strategies provide investors with the opportunity to participate in novel and sophisticated investment strategies that are focused on achieving specific return outcomes, regardless of the market environment. Fidelity’s alternative ETFs provide investors with the ability to access alternative strategies via unitized investment solutions; thus, allowing them to integrate these solutions within their existing portfolio of investment instruments. The newly launched funds are:
Fidelity Canadian Long/Short Alternative Fund (Ticker: FCLS)
The fund will invest in long positions of companies expected to outperform the S&P/TSX Capped Composite Index and short companies that are expected to underperform the index. The manager will employ a systematic approach to selecting securities held within the fund and utilize a rules-based approach to assist in ongoing portfolio management.
The fund will hold between 120-150% of its net asset value long and generally around 30% of its net asset value short but may short up to 50% of its net asset value.
Fidelity Global Value Long/Short Fund (Ticker: FGLS)
As a globally focused solution, the fund will have long and short positions in both equity and credit securities, across different countries and regions. The manager will employ a value-oriented investment approach that seeks to identify securities that are trading at discounts (long positions) or premiums (short positions) to the estimates of their intrinsic value.
The fund will reflect a high-conviction approach to investing, in that, the number of equity holdings will be relatively small on both the long and short side. Furthermore, The Fund will typically be structured so that it holds between 100-150% of its net asset value long and up to 50% of its net asset value short.
Fidelity Long/Short Alternative Fund (Ticker: FLSA)
The fund will maintain both long and short exposure to a diversified portfolio of primarily Canadian and U.S. equities, utilizing a bottom-up fundamental analysis investment strategy that seeks to identify trends or organizational changes which have the potential to lead to important business developments that the market appears to have ignored or mispriced.
The manager is not limited to using a particular investment style and the fund is structured to hold between 100-150% of its net asset value long and generally around 30% of its net asset value short but may short up to 50% of its net asset value.
Fidelity Market Neutral Alternative Fund (Ticker: FMNA)
The fund will maintain both long and short exposure to a diversified portfolio of primarily Canadian and U.S. equities which involves simultaneously investing in growth-oriented equities of companies whose magnitude and duration of growth is apparently faster and longer than the market expectation and immediately selling equities of companies with decelerating growth rates or facing increased competition.
The manager uses a bottom-up, fundamental analysis investment strategy to identify both long and short investment ideas and perceived market inefficiencies; while maintaining minimal equity market exposure (i.e. market neutral), by holding on average, 100% of its net asset value long and 100% of its net asset value short with a 0% net equity market exposure.
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
