Fidelity to roll out more active ETFs

The fund manager is looking to significantly boost its local lineup of active ETFs.

Fidelity is seeking the approval of unitholders to modify the constitutions of a number of its managed funds to enable listing of a class of units on either the ASX or Cboe.

In a statement to Financial Standard, Fidelity International Australia managing director Lawrence Hanson confirmed it is looking to launch several strategies as active ETFs this year but was unable to comment as to specifics of the strategies.

"Fidelity is committed to making investing with us as easy as possible," he said.

"Investors enjoy the ease of investing and transacting of ETFs, and we're aiming to offer more of our best-in-class strategies through this vehicle over the year.

"We will be able to provide more detail on these launches in due course."

According to unitholder communications, the funds Fidelity will potentially offer as active ETFs include the Fidelity Asia Fund, Fidelity Australian Opportunities Fund, Fidelity Global Future Leaders Fund, and the Fidelity India Fund.

The Fidelity Asia Fund first came to market in September 2005 and has since returned 9.65% per annum against the benchmark's 7.02%. It has just over $1 billion in funds under management (FUM), as of this month. The Fidelity Australian Opportunities Fund has outperformed its benchmark by 0.73% per annum, with a return since its 2012 inception of 10.35% per annum. It has about $183 million in FUM.

Meantime, the $88 million Fidelity Global Future Leaders Fund has returned 11.85% per annum since its 2020 inception, beating the index's 10.81%, while the Fidelity India Fund - which also launched in 2005 - has delivered 10.67% since inception, outperforming the benchmark by 0.48%. It currently has about $275 million in FUM.

A meeting of unitholders will be convened on May 14 to vote on whether the constitution should be modified, and a new class of units allowed to be listed. At least 75% of unitholders must vote in favour.

Fidelity launched its first active ETF on the ASX in 2018, the Global Emerging Markets Fund (Managed Fund). It then waited until December 2021 to bring the Fidelity Global Demographics Fund (Managed Fund) to market.

Its decision to add further active ETFs comes as the Australian ETF industry is likely to exceed $200 billion this year, with active ETFs expected to play a big role in the growth. As at the end of 2023, there were 94 active ETFs trading on local exchanges, accounting for about $35 billion of the overall FUM.

Note: This article was updated at 4.50pm.