Fidelity Active ETFs: What Are They and Are They Worth Investing In?

Introduction

Fidelity Investments recently launched a suite of active exchange-traded funds (ETFs), offering investors a new way to access actively managed investment strategies. In this article, we will explore what Fidelity Active ETFs are, how they work, and whether they are a good investment for you.

What Are Fidelity Active ETFs?

Fidelity Active ETFs are actively managed ETFs that invest in a specific market segment or asset class. Unlike traditional ETFs, which track a passive index, active ETFs are managed by a portfolio manager who makes investment decisions based on their research and analysis. This allows for more flexibility and the potential for higher returns, but also comes with higher fees.

Types of Fidelity Active ETFs

Fidelity currently offers four Active ETFs, each focused on a different investment theme:

• Fidelity Growth Opportunities ETF (FGRO): Invests in high-growth companies.
• Fidelity Magellan ETF (FMAG): Invests in large-cap growth stocks.
• Fidelity Real Estate Investment ETF (FPRO): Invests in real estate investment trusts (REITs).
• Fidelity Sustainable Global Equity ETF (FSGE): Invests in companies with strong environmental, social, and governance (ESG) practices.

How Do Fidelity Active ETFs Work?

Fidelity Active ETFs are traded on the stock exchange just like traditional ETFs. However, instead of tracking an index, they are managed by a portfolio manager who makes investment decisions based on their research and analysis. The portfolio manager will buy and sell stocks within the ETF to achieve the desired investment objective. This allows for more flexibility and the potential for higher returns, but also comes with higher fees.

Are Fidelity Active ETFs Worth Investing In?

Whether or not Fidelity Active ETFs are a good investment for you depends on your individual investment goals and risk tolerance. If you are looking for a low-cost, passive investment option, then a traditional index ETF may be a better choice. However, if you are willing to pay higher fees for the potential of higher returns, then an active ETF could be a good option.

It is important to remember that all investments carry some level of risk, and active ETFs are no exception. Before investing in any ETF, you should carefully consider your investment goals, risk tolerance, and time horizon.