Fidelity International has announced an expansion of its active exchange-traded fund (ETF) offering in Europe with its new high-conviction Fundamental Equity ETF range.

The range launches with two new products, the Fidelity US Fundamental Large Cap Core ETF and Fidelity US Fundamental Small-Mid Cap UCITS ETF.

The ETFs are sub-advised by Fidelity Investments, a separate US-based company, and are available to clients of Fidelity International through its Irish UCITS ETF range.

They provide access to Fidelity Investments’ active management and research capabilities across the US equity investment universe, looking to employ processes to extract and combine investment ideas from multiple Fidelity Investments portfolio managers into single strategies.

Fidelity said its US Fundamental Small-Mid Cap UCITS ETF was the first Irish-domiciled UCITS ETF in Europe to employ the principles-based semi-transparent structure recently approved by the Central Bank of Ireland.

This structure aims to allow ETF providers to meet client demand for ETFs that incorporate research by also allowing them to protect their active research intellectual property.

The ETF aims to provide long-term growth through primarily investing in securities with small to medium market capitalisations, while remaining unconstrained to any particular investment style.

Meanwhile, the Fidelity Fundamental Large Cap Core UCITS ETF seeks long-term growth of capital, primarily investing in equity securities of US companies with large market capitalisations.

“In Europe, the initial wave of active ETFs took the form of benchmark-aware enhanced strategies, but investors are now looking to complement that with higher-conviction strategies,” said Fidelity International head of ETF product & capital markets for Europe and Asia Pacific, Neil Davies.

“This launch seeks to meet this demand by leveraging proprietary Fidelity Investments’ research through an ETF wrapper. We believe higher-conviction ETFs have the potential to drive the next phase of growth in the European ETF market.

“By employing Fidelity Investments’ active expertise in a risk-aware manner, these higher-conviction ETFs provide greater opportunity for alpha while still allowing investors to enjoy many of the core benefits of the ETF wrapper, such as the ability to trade throughout the day.”

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