Fidelity Investments has launched four new thematic ETFs – the Fidelity Clean Energy ETF (FRNW), Fidelity Cloud Computing ETF (FCLD), Fidelity Digital Health ETF (FDHT), and Fidelity Electric Vehicles and Future Transportation ETF (FDRV).
The ETFs began trading on the Cboe BZX Exchange and are available commission-free for individual investors and financial advisers through Fidelity’s online brokerage platforms.
Fidelity writes that it is one of the industry’s leading distributors of ETFs with more than USD859 billion in ETF client assets under administration. With this launch, Fidelity now offers 46 ETFs with more than USD30.6 billion in assets under management.
Through Fidelity’s US platforms, individual investors and advisers have access to more than 2,000 ETFs, commission-free. Fidelity also offers investors educational resources and a powerful ETF screener.
According to Morningstar, assets under management in thematic funds have more than tripled in three years through March 2021, reaching USD595 billion globally.
“Thematic investing is a significant growth area as investors increasingly look for opportunities to enhance their portfolios and align their investments with their values and personal passions,” says Greg Friedman, Fidelity’s Head of ETF Management and Strategy. “We continue to look for ways to leverage our investment expertise and investor insights to offer a wide array of innovative ETFs.”
The four passively managed, self-indexed ETFs utilise Fidelity’s quantitative capabilities, including its proprietary indices.
“Fidelity’s quantitative team harnesses the scale, technology, and decades of data and analysis to help strengthen our investment processes, and, ultimately, help meet our customers’ evolving needs,” says Denise Chisholm, Fidelity’s Director of Quantitative Market Strategy. “In addition to sector and factor investments, thematic investments can serve as another tool for investors that are increasingly looking for differentiated investment options to help meet their distinct financial goals.”
Fidelity’s quantitative research and investment team developed a rules-based methodology for these four new thematic indices, which uses a combination of company revenue data and natural language processing (NLP) to identify the companies in each index. Additional quality screens are used to help mitigate individual security risk within each index.
Fidelity now offers 33 mutual funds and ETFs that cover a range of thematic categories, including, megatrends, sustainability, outcome-oriented, differentiated insights and disruption. The disruptive mutual funds include time-based pricing which provides lower expense ratios for shareholders who invest in one of the disruptive mutual funds through a Fidelity retail account and remain in the fund for extended periods.
Fidelity Clean Energy ETF (FRNW) normally invests at least 80 per cent of its assets in securities included in the Fidelity Clean Energy Index and in depositary receipts representing securities included in the index. The Fidelity Clean Energy Index is designed to reflect the performance of a global universe of companies across the market capitalization spectrum that distribute, produce or provide technology or equipment to support the production of energy from solar, wind, hydrogen and other renewable sources.
Fidelity Cloud Computing ETF (FCLD) normally invests at least 80 per cent of its assets in securities included in the Fidelity Cloud Computing Index and in depositary receipts representing securities included in the index. The Fidelity Cloud Computing Index is designed to reflect the performance of a global universe of companies across the market capitalization spectrum that provide products or services enabling the increased adoption of cloud computing, characterized by the delivery of computing services over the internet.
Fidelity Digital Health ETF (FDHT) normally invests at least 80 per cent of its assets in securities included in the Fidelity Digital Health Index and in depositary receipts representing securities included in the index. The Fidelity Digital Health Index is designed to reflect the performance of a global universe of companies across the market capitalization spectrum providing healthcare records management, connected healthcare devices, surgical robotics, telemedicine, and other technology-enabled healthcare products and services.
Fidelity Electric Vehicles and Future Transportation ETF (FDRV) normally invests at least 80 per cent of its assets in securities included in the Fidelity Electric Vehicles and Future Transportation Index and in depositary receipts representing securities included in the index. The Fidelity Electric Vehicles and Future Transportation Index is designed to reflect the performance of a global universe of companies across the market capitalisation spectrum engaged in the production of electric and/or autonomous vehicles and their components, technology, or energy systems or engaged in other initiatives that aim to change the future of transportation.
