Fidelity won approval to launch their much anticipated incursion into the ETF arena last week. Matt Reiner commented in Barrons.com concerning the new launch.
Fidelity will likely focus on actively managed fixed-income funds in the near term, which makes sense to Reiner.
“They’re not going to make a splash with an S&P 500 index fund; that market is already established,” says Matt Reiner, Chief Investment Officer. “Fidelity is such a good fixed-income firm, they can make a splash on the active front in that area.”
One thing to watch: How Fidelity’s ETF business works with its mutual-fund business. For instance, “Are they going to be the first major provider of ETFs in 401k plans?” Reiner says. “That’s direct cannibalization of their fund business.” Fidelity executives have indicated that investors would not see ETFs flooding their Fidelity-administered 401(k) plans.
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