Fidelity adds to ETFs push with new launches

Fidelity International has launched two income-focused smart beta ETFs, the first of the kind for the fund group.

Early in 2016, Fidelity said the group was planning to boost its passive offering, having already added ETFs to its FundsNetwork platform at the end of 2015.

The new funds, which start trading today, are the Fidelity Global Quality Income Ucits ETF and the Fidelity US Quality Income Ucits ETF.

The funds will invest in high quality companies which can pay “attractive dividends”, says the firm, and will be tracking Fidelity’s in-house indexes, instead of benchmarks from the MSCI World and S&P 500.

Fidelity International already offers 14 index-tracking mutual funds.

Head of ETFs Nick King, who was hired from BlackRock in 2015 to build the ETFs team for the company, will be responsible for the funds.

King says: “Fidelity International is focused on providing world class investment solutions. Demand for smart beta strategies has been growing in recent years and is expected to continue to accelerate as investors look for competitively priced, differentiated products which provide a particular investment outcome. This is an area we believe our proven research capabilities and expertise can add value and increased choice for our clients.

“Our first smart beta ETFs will track Fidelity-branded indices which leverage our experience in security analysis and portfolio construction. By combining our active investment expertise with the systematic aspects of passive investing, we believe we can offer a truly differentiated product.”

Charges will be 0.3 per cent for the US fund and 0.4 per cent for the global fund.

The funds will trade on the London Stock Exchange and Deutsche Boerse.

The LSE has welcomed the new launch.

London Stock Exchange Group global head of fixed income products Pietro Poletto says: “We are delighted that Fidelity has become the latest ETF issuer to list products in London, responding to the increasingly strong demand from European investors.

“LSE is a leading ETF trading venue in Europe and working with market participants, we hope to continue to build on this position by encouraging new issuers and products to market.”