Fidelity Investments is planning to convert six more of its mutual funds into exchange-traded funds, adding to a trend that’s affected nearly $100 billion in assets.
The Boston-based asset manager will turn the six actively managed mutual funds into ETFs in November, according to a filing Wednesday. Those funds collectively manage assets worth roughly $13 billion.
The Fidelity Large Cap Value Enhanced Index Fund, with $5.2 billion in assets, is the largest fund set to undergo the switch.
Including Fidelity’s planned move, more than 50 mutual funds have been switched to ETFs since the first such conversion two years ago, according to data compiled by Bloomberg Intelligence.
It’s a tactic that’s proved increasingly popular as investors opt for lower-cost, tax-efficient ETFs over their mutual fund brethren. Investment Company Institute data show that mutual funds are on track to post net outflows for a sixth consecutive year, while ETFs have absorbed about $194 billion in 2023.
The conversions include benefits such as “lower expenses, additional trading flexibility, increased portfolio holdings transparency and the potential for enhanced tax efficiency,” according to Wednesday’s filing. The management teams will remain the same, and expense ratios on the new ETFs haven’t been set yet, a Fidelity spokesperson said.
Most firms place a limit on advisors’ sales of alternative investments to clients in the neighborhood of 10% a customer’s net worth.
Those jumping ship include women advisors and breakaways.
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The agent, Todd Bernstein, 67, has been charged with four counts of insurance fraud linked to allegedly switching clients from one set of annuities to another.
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