The filing, if approved, would allow Fidelity to offer almost every type of index ETF available, including international funds and even "long/short" ETFs that mimic sophisticated hedge fund strategies, according to the paper. If the company moves forward, it would be jumping into a space that has become hugely popular.
“Fidelity is late to the game,” Tom Lydon, (left), editor of ETF Trends and author of “The ETF Trend Following Playbook,” told AdvisorOne. “They have size and strong distribution, which is the reason they’re one of the only companies that could be this late and still be successful.”
Lydon, who will host a “virtual ETF summit” on Jan. 10 that will include Morningstar ETF analyst Scott Burns and PIMCO chief Bill Gross, adds the company has tried to avoid adding ETFs to 401(k)s, but with recent transparency and point-of-sale disclosure rules, it’s something that is increasingly difficult
“They’ll offer pure beta products, just like Schwab does now,” he said. “It’s nice to see another player like this in the space. The competition will be good for the industry.”
Investors would be able to buy the ETFs through their brokerage accounts and even 401(k) plans or IRAs, regardless of their affiliation with Fidelity.
The paper notes the U.S. ETF business is currently dominated by three firms—BlackRock Inc.'s iShares unit, State Street Corp.'s State Street Global Advisors and Vanguard Group Inc. Together, they manage 82% of the more than $1 trillion in U.S.-listed exchange-traded assets at the end of the third quarter, according to the BlackRock Investment Institute.