Fidelity to List Crypto- and Metaverse-Themed ETFs Next Week

One day after Fidelity’s spot Bitcoin ETF was rejected by the SEC, the firm filed an application for the crypto-themed ETF.

Fidelity had started its exploration of blockchain technology in 2014 with Bitcoin mining and in 2018 launched its first commercial offering, Fidelity Digital Assets, a platform offering custody and trade execution for digital assets to institutional investors.

In 2020, Fidelity’s digital asset management business launched a private Bitcoin fund that is still available to accredited investors.

The new ETF offering will enable a wider set of investors to participate in the emerging digital assets ecosystem via exposure to related equity securities, Fidelity said.

Metaverse Momentum

The Fidelity Metaverse ETF, meanwhile, can “help investors invest in the evolution and future of the internet,” according to the firm.

It provides “access to companies that develop, manufacture, distribute, or sell products or services related to establishing and enabling the metaverse, such as computing hardware and components, digital infrastructure, design and engineering software, gaming technology and software, web development and content services, and smart phone and wearable technology,” the firm said.

The metaverse-themed ETF will “normally invest at least 80% of assets in securities included in the Fidelity Metaverse Index and in depositary receipts representing securities included in the index,” Fidelity said.

“Metaverse” is a term used to describe a future state of the internet characterized by a network of augmented reality and virtual worlds that can be experienced persistently and in a shared environment by large numbers of users.

The new passively managed crypto and metaverse-themed ETFs will have expense ratios of 0.39%, which Fidelity said is the lowest available for ETFs of their kind. They are self-indexed ETFs, using Fidelity’s proprietary indexes, “constructed by Fidelity’s quantitative investing team, to identify equity securities that offer exposure to these rapidly growing industries,” it said.

With the launch, Fidelity will offer 51 ETFs in all, with over $33 billion in assets under management.

The Other New Funds

Fidelity’s five new sustainable fixed income mutual funds and ETFs will use the firm’s proprietary environmental, social and governance ratings frameworks, along with third-party ESG ratings, to evaluate an issuer’s sustainable business practices, it said. The mutual funds will have retail and advisor share classes.

With their listings, Fidelity’s sustainable lineup will include 22 funds, including thematic sustainable funds that focus on a specific ESG theme and broad sustainable funds that include all three ESG themes, it said.

Fidelity Investments had total assets under administration of $11.1 trillion, including discretionary assets of $4.2 trillion, as of Feb. 28, the company said.

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