A company known primarily for its actively managed mutual funds might finally be coming to grips with the fact that they can no longer just ignore the fast growing ETF space. According to The Wall Street Journal, Fidelity Investments appears set to begin offering a broad array of ETFs after recently filing an application with the SEC.
As we explained way back in May of 2009, ETFs were “Eating Fidelity’s Lunch”. Back then, it had already become clear that a primary reason for Fidelity’s deteriorating asset levels was the rapid growth of ETFs. Fidelity was clearly concerned with entering a market that was an obvious competitor to their lucrative actively managed mutual fund business. Remember, actively managed mutual funds charge significantly higher fees than ETFs (and more often than not, underperform the same benchmarks those ETFs are tracking). Unfortunately for Fidelity, investors have continued to vote with their money and it looks as if Fidelity is finally realizing where the future of investing is heading.
As they say, better late than never…
