BOSTON — Fidelity Investments®, one of the industry’s leading providers of exchange traded funds (ETFs) with more than $300 billion in ETF assets under administration2, today announced it is expanding its factor-based ETF offerings for individual investors and financial advisors with the introduction of two international factor-based ETFs: Fidelity International High Dividend ETF (FIDI) and Fidelity International Value Factor ETF (FIVA).
The new ETFs, which began trading on the New York Stock Exchange today, are competitively priced with total expense ratios of just 0.39%. They are available to individual investors and financial advisors commission-free3 through Fidelity’s online brokerage platforms.
“Many investors have expressed strong interest in international dividend and value factor strategies,” said Greg Friedman, head of ETF management and strategy at Fidelity. “These new ETFs, which will help us address that demand, benefit from our powerful research capabilities and decades of investing experience and expertise and provides great value to investors.”
With the addition of these two ETFs, investors now have access to 93 commission-free ETFs, including the full suite of eight domestic and international factor ETFs, three Fidelity actively-managed bond ETFs, 11 Fidelity passive equity sector ETFs, Fidelity ONEQ, and 70 passive iShares ETFs. Fidelity’s commission-free ETF lineup continues to see tremendous asset growth, reaching $106 billion in AUA4.
“Overall cost is a key consideration when evaluating ETFs. Commissions, bid-ask spreads, and expense ratios are three important factors in evaluating overall ETF cost,” says Friedman. “Our commission-free ETFs provide customers with tighter spreads and lower expense ratios, compared to the average commission-free ETFs.”
Fidelity International Factor-based ETFs Investment Objectives and Index Definitions
- Fidelity International High Dividend ETF (FIDI) will seek to provide investment results that correspond to the total return of dividend-paying stocks, as represented by the Fidelity International High Dividend Index. The Fidelity International High Dividend Index is designed to reflect the performance of international high dividend-paying stocks that are expected to continue to pay and grow their dividends. The index consists of stocks of companies with high dividend yields, low dividend payout ratios and high dividend growth.
- Fidelity International Value Factor ETF (FIVA) will seek to provide investment results that correspond to the total return of international stocks exhibiting value characteristics, as represented by the Fidelity International Value Factor Index. The Fidelity International Value Factor Index is designed to reflect the performance of international stocks that have attractive valuations. The index consists of stocks of companies with high free-cash-flow yield, low enterprise value to EBITDA (earnings before interest, taxes, depreciation and amortization), low price to tangible book value and low price to future earnings.
New ETFs Complement Fidelity’s International Investment Capabilities
With $69 billion in net inflows industrywide over the past 5 year(s), international factor-based ETFs now represent an approximately $99 billion market. “Dividend ETFs are one of the largest categories of international smart beta assets,” said Friedman. “While value strategies are among the most popular of U.S.-focused factor or “smart beta” ETFs, internationally-focused factor strategies are still few and far between.”
These new ETFs build on and complement Fidelity’s broader international investment capabilities, including Fidelity’s actively-managed mutual funds that target factors like international growth, and may be attractive to investors looking for similar offerings in an ETF.
Fidelity Provides Additional Factor and ETF Educational Resources
To help investors and advisors learn more about how international factor strategies may complement existing portfolios, Fidelity has published a new research paper, “Translating Factors in International Markets.” Other Fidelity research on factor investing include “An Overview of Factor Investing” and “Putting Factors to Work.”
Fidelity’s customers can find in-depth investment insights, research, education and a highly customizable screener for finding ETFs and other exchange traded products (ETPs) at the ETF landing zone (www.fidelity.com/etfs) on Fidelity.com.
About Fidelity Investments
Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $6.7 trillion, including managed assets of $2.4 trillion as of November 30, 2017, we focus on meeting the unique needs of a diverse set of customers: helping more than 26 million people invest their own life savings, 23,000 businesses manage employee benefit programs, as well as providing more than 12,500 financial advisory firms with investment and technology solutions to invest their own clients’ money. Privately held for 70 years, Fidelity employs more than 40,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.