Fidelity’s passive sector ETFs surpass $1 billion in assets

Jul 14th, 2014 | By | Category: Equities

Fidelity Investments, a leading global asset manager, has announced that its 10 passively managed US equity sector exchange-traded funds (ETFs) have surpassed $1 billion in assets under management.

Fidelity’s passive sector ETFs surpass $1 billion in assets

Fidelity Investments’ passive US equity sector ETFs have surpassed $1 billion in assets under management.

A significant portion of the asset growth has 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, including the largest, the Fidelity MSCI Health Care Index ETF (FHLC), at $172 million.

The ETFs, which began trading on the NYSE Arca just eight months ago, offer the industry’s lowest total expense ratio at 0.12 percent. Moreover, they are available to individual investors and registered investment advisors (RIAs) to buy commission free online through one of Fidelity’s brokerage platforms.

Anthony Rochte, president of SelectCo, Fidelity’s dedicated sector investing division, commented: “Surpassing the $1 billion milestone in such a short period of time clearly demonstrates the growing demand for sector investments. 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.”

David Haviland, a portfolio manager at Beaumont Capital Management, said: “As investment advisors, we’re looking to provide our clients with solutions that help diversify portfolios and are cost-effective. 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.”

As part of its broader strategic relationship, Fidelity uses BlackRock, the parent of iShares, as the sub-advisor for its 10 passive sector ETFs, leveraging the firm’s passive investment management expertise and scale.

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