Fidelity files for two multifactor ETFs

Nov 26th, 2018 | By | Category: Equities

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Fidelity Investments has filed registration documents with the US Securities and Exchange Commission (SEC) for the listing of two new multifactor equity ETFs on Cboe BZX.

Fidelity files for two multifactor ETFs

Fidelity currently offers ten factor-based funds in the US.

The proposed funds – the Fidelity Targeted Emerging Markets Factor ETF and Fidelity Targeted International Factor ETF – will invest in emerging market and developed market (ex-US) stocks, respectively.

The funds will track proprietary indices created in-house at Fidelity, and stocks will be drawn from investment universes containing all large- and mid-caps within each segment.

Companies that have attractive valuations, high-quality profiles, positive momentum signals, lower volatility than the broader universe, and lower correlation to the US equity market will be favoured by the methodology.

The funds will weight their holdings by free float-adjusted market capitalization.

Fidelity already offers a suite of ten factor-based ETFs in the US. These include five single-factor US equity funds (high dividend, low volatility, momentum, quality, and value), two international single-factor funds (high dividend and value), two fixed income factor funds, and a dividend ETF that picks stocks that are likely to outperform in an environment of rising interest rates.

The proposed ETFs will be Fidelity’s first multifactor equity funds.

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