An Advisor’s Guide to Fidelity’s Disruptive ETF Suite

The suite seeks companies with innovative business models, emerging industries, and technologies that are changing the status quo. These methods of doing business could lead to disruption, causing dislocations that could displace industry peers. This disruption potential includes developing, contributing, or providing new business models or expanded ones. It also includes creating or contributing to value networks, pricing, and delivery of products or services.

Five Fidelity ETFs offer thematic, disruptive exposure as well as one overall ETF that offers equal exposure across all five. All the funds seek long-term growth of capital. They all also include an analysis of individual company financial health, economic and market conditions, and industry positioning when investing.

The Fidelity Disruptive Technology ETF (FDTX B+) includes, but is not limited to, companies Fidelity believes are engaged in big data, cybersecurity, or software as a service. In addition, it includes companies involved in consumer technology, rideshare, ecommerce, and next-generation hardware. The fund invests across sectors when seeking to fulfill its strategy.

The Fidelity Disruptive Automation ETF (FBOT B+) invests in, but isn’t limited to, companies manufacturing and designing automation. It also invests in companies that enable processes, technology, or tools related to artificial intelligence and robotics. Also included are companies involved in machine vision, pneumatic systems, process sensors, autonomous driving, and 3D printing. FBOT invests across sectors.

The Fidelity Disruptive Communications ETF (FDCF B+) includes, but is not limited to, companies whose businesses are involved in next-generation digital infrastructure and connected devices. This includes 5G communication as well as cloud networking. It also invests in companies that derive business from social media. FDCF invests across sectors in pursuit of its strategy.

The Fidelity Disruptive Finance ETF (FDFF B) invests in, but isn’t limited to, companies developing digital solutions. These solutions seek to deliver more efficient, cost-effective, and custom financial services. This includes blockchain technology, data processing, and digital payments as well as other disruptive insurance and lending business models. FDFF concentrates the majority of its investments in the financial sector.

The Fidelity Disruptive Medicine ETF (FMED B-) invests in, but isn’t limited to, those companies involved in gene therapy, robotic surgery, and genomics. Also included are companies working in immunotherapy, rare diseases, and medical equipment and devices. Furthermore, the strategy invests in companies engaged in technology-based healthcare platforms, and consumer wellness. FMED concentrates most of its investments within the healthcare sector.

The Fidelity Disruptors ETF (FDIF B) invests across the five disruptive themes of the other funds. It invests in disruptive automation, technology, finance, medicine, and communications. By investing across the major disruptive categories, the ETF offers a more pure-play approach to the potential of disruptive companies. It also seeks diversified exposure by investing across sectors and business focuses.

All the funds invest domestically as well as internationally, and in growth as well as value companies. All six ETFs carry an expense ratio of 0.50%.

For more news, information, and analysis, visit the ETF Investing Channel.

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