Fidelity Investments today launched two fully transparent, actively managed bond exchange-traded funds, expanding its existing lineup of five actively managed bond ETFs. Both new funds charge a fee of 0.36%, and both mimic the strategies of existing mutual funds.
The Fidelity Investment Grade Bond ETF (FIGB) invests mainly in domestic and foreign issuers of medium and high-quality investment-grade debt securities.
It resembles the Fidelity Investment Grade Bond Fund (FBNDX), categorized as an intermediate core bond fund by Morningstar. This product offered a 30-day SEC yield of 1.06% as of Feb. 28, and has an expense ratio of 0.45%. Both the ETF and mutual fund versions are managed by Jeff Moore and Michael Plage.
The Fidelity Investment Grade Securitized ETF (FSEC) focuses on medium- and high-quality, investment-grade securitized debt including mortgage-backed securities, commercial mortgage-backed securities and other asset-backed securities issued by the U.S. government and its agencies, foreign governments and corporations.
This ETF is similar to the Fidelity Series Investment Grade Securitized Fund (FHPFX), a Fidelity Series mutual fund available only to certain other Fidelity funds and Fidelity managed 529 plans. It is classified as an intermediate core bond, and sported a recent 30-day yield of 0.83%. Fidelity Series funds charge minimal to no fees to end users, so there’s no apples-to-apples fee comparison regarding FHPFX and its like-minded ETF.
Both the Fidelity Investment Grade Securitized ETF and its cousin mutual fund are managed by Franco Castagliuolo and Sean Corcoran.
According to a Fidelity spokesperson, the two new ETFs aren’t exact clones of the existing mutual funds due to slight differences in their respective portfolios.
The new products are available commission-free for individual investors and financial advisors through Fidelity’s online brokerage platforms. All told, Fidelity manages 39 ETFs with more than $25 billion in assets.