Fidelity International has continued its foray into the exchange-traded fund (ETF) market with the launch of two income-focused smart beta products.
The Fidelity Global Quality Income and US Quality Income Ucits ETFs will target an above market yield from a portfolio of companies that generate stable earnings and cash flows. The firm’s team will oversee sector and country exposures in a bid to help ensure risk is minimised.
The US fund will have an ongoing charge of 0.3%, while the global fund levies 0.4%. Both started trading on both the London Stock Exchange and Deutsche Boerse this morning.
In February 2016 it recruited a team to launch its own ETFs 'based on client demand'. This followed the hire of Nick King the previous summer as head of ETFs.
The two funds will be the first ETFs for the company, marking Fidelity International's entry into the ever more competitive ETF market.
King said: ‘Fidelity International is focused on providing world class investment solutions. Demand for smart beta strategies has been growing in recent years and is expected to continue to accelerate as investors look for competitively priced, differentiated products which provide a particular investment outcome. This is an area we believe our proven research capabilities and expertise can add value and increased choice for our clients.
‘Our first smart beta ETFs will track Fidelity-branded indices which leverage our experience in security analysis and portfolio construction. By combining our active investment expertise with the systematic aspects of passive investing, we believe we can offer a truly differentiated product.'