Fidelity files for nontransparent, active ETFs

Giant of active management joins other fund companies asking for new rules to allow it to offer more ETFs.
NOV 17, 2014
Fidelity Investments Friday asked regulators to allow it to offer actively managed exchange-traded funds that do not regularly disclose their underlying holdings. The company has already asked for permission to offer actively managed ETFs, but Friday's filing is its first for a fund that would not disclose its holdings daily basis, as ETFs are required to do. Fidelity joins BlackRock, PowerShares, State Street Global Advisors and Eaton Vance in asking for this type of permission, which the Securities and Exchange Commission has not granted. The agencyhas indicated it will decide on some proposals this year, which could lead to a flood of entrants and new products in the fast-growing, $2.7 trillion ETF market. By not disclosing daily holdings, ETF managers can better avoid revealing their bets, which fund companies argue could allow other traders to take advantage of the funds' investors. (See also: Ready or not, mutual funds, active ETFs set to take off) Fidelity's request came in a filing with the SEC late Friday. Compared with other mutual fund managers, Fidelity is late to the ETF business. After years with just one fund, the Boston-based fund giant launched 10 last year. The sector strategies are managed on a day-to-day basis, or "subadvised," by BlackRock Inc., the largest money manager and a top-three sponsor of ETFs.

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