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Fidelity launches active nontransparent ETFs. What's ahead for the new structure

The ANTs are marching.

Fidelity became the third company to launch active nontransparent ETFs (ANTs) last Thursday, following American Century and Legg Mason in introducing funds under the new, semiconfidential structure the SEC greenlit for some issuers last year.

ANTs are actively managed exchange-traded funds that disclose their holdings quarterly instead of daily, giving managers a chance to use their strategies in cheaper alternatives to mutual funds without running the risk of being copied or front-run.

The Fidelity Blue Chip Growth ETF (FBCG), the Fidelity Blue Chip Value ETF (FBCV) and the Fidelity New Millennium ETF (FMIL) have now been trading for one week. Each one has an expense ratio of 59 basis points, or 0.59%.

FBCG is down almost 2% since its launch while FBCV and FMIL have each lost roughly 4.5%, as of Thursday afternoon.

The advent of ANTs "was an evolution of the mutual fund industry that was a gap that needed to be filled for a long time," Phil Mackintosh, chief economist at the Nasdaq, told CNBC's "ETF Edge" on Monday.

"Now that they're approved, it really doesn't surprise me that there's people coming to market with these ETF products that are copycats of their well-known mutual fund products with a track record," he said.

It didn't surprise ETF Trends' Dave Nadig, either, though he expected more from the industry than countless copycat funds.

"The question is does anybody actually want these strategies?" Nadig, his firm's chief investment officer and director of research, said in the same "ETF Edge" interview about Fidelity's new ETFs.

"Two of them are blue-chip growth and blue-chip value. Those are such vanilla strategies, even if they're actively managed right now, that it's surprising you'd even bother to put them in a nontransparent structure," he said. "Is Fidelity really worried people are going to front-run their position in Salesforce.com?"

Soon enough, massive issuers like Fidelity might start leveraging some of their better-known brands like Magellan or Contrafund in this structure, Nadig said.

"I think what's next here is the marketing angle," he said. "I'm dying to see one of these companies come out with a real, big, brand-named fund that people will really understand. Like, we need a Growth Fund of America in an ETF wrapper to really understand whether that's going to drive flows because right now, we haven't seen big flows into those funds that are out."

That, in turn, could get mutual fund issuers better access to individual investors' portfolios, Mackintosh said.

"You've got these Robinhoods and robo-advisors that are putting ETFs into people's portfolios, and if all you offer is mutual funds, you don't have access to that customer base," the Nasdaq economist said.

"So, just being able to clone your mutual fund into an active ETF I think opens up a whole distribution arm. But also, we've had active ETFs for a long time. It's not like active itself is new. We've had transparent active, we've had these smart-beta funds and they've protected investors and they've been great ways to get exposure as well."

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