Fidelity has launched two factor ETFs: the Fidelity Low Duration Bond Factor ETF (FLDR) and Fidelity High Yield Factor ETF (FDHY).
Fidelity writes that the new ETFs are competitively priced with total expense ratios of just 0.15 per cent for FLDR and 0.45 per cent for FDHY. The Fidelity Low Duration Bond Factor ETF is trading on the CBOE BZX Exchange, and Fidelity High Yield Factor ETF on the New York Stock Exchange.
Fidelity writes that these new fixed income and high income factor ETFs apply Fidelity’s quantitative analysis and proprietary risk management to seek sources of income to help drive better portfolio outcomes. Fidelity currently manages more than USD1.13 trillion in fixed income and high income assets backed by more than 261 investment professionals worldwide.
“With a quantitative, rules-based methodology at its core and an active liquidity overlay, Fidelity High Yield Factor ETF leverages our extensive high income capabilities to offer an enhanced exposure to the high yield market for ETF investors,” says Greg Friedman, head of ETF management and strategy at Fidelity. “Fidelity Low Duration Bond Factor ETF is unique in its category because it seeks a balance between credit risk and interest rate risk, on top of pursuing higher income potential than a money market with lower volatility than a short-term bond fund.”