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SEC Grants Fidelity Permission to Actively Manage ETFs

Fidelity Investments
JB Reed | Bloomberg | Getty Images
Fidelity Investments

Fidelity Investments said on Tuesday it received permission from U.S. regulators to open its own actively managed exchange-traded funds, as the mutual fund firm seeks to catch up in the faster-growing ETF segment.

Boston-based Fidelity in December filed an application to set up a series of actively managed ETFs with the Securities and Exchange Commission, and the agency approved the request last week, spokesman Jeff Cathie said.

Fidelity is expected to open a line of ETFs focused on various sectors of the U.S. equity market, but Cathie declined to comment on specific plans. "While we are pleased that the SEC has issued an order granting our requested relief, we continue to evaluate the product needs of our clients and it would be premature to discuss our ETF product plans at this time," he said.

Similar to mutual funds, ETFs own a basket of stocks, bonds or other investments. But ETF shares trade in real time on an exchange while mutual funds shares are priced and can be bought and sold only once a day.

The SEC has previously approved similar active ETF applications from other mutual fund companies, including T. Rowe Price Group and Franklin Resources. All are far behind market leader BlackRock, which primarily operates passively managed ETFs.