Investment Operations

State Street to Provide Servicing to Fidelity’s Proxy Basket ETFs

State Street Bank & Trust

State Street confirmed today that it was appointed ETF servicing agent for Fidelity Investments’ new range of semi-transparent, actively managed ETFs.

Fidelity is the first asset manager to receive regulatory approval for three investment strategies, Fidelity Blue Chip Growth ETF (FBCG), Fidelity Blue Chip Value ETF (FBCV) and Fidelity New Millennium ETF (FMIL), which will be available through Fidelity’s proprietary proxy basket methodology. The structure allows Fidelity to deliver its actively-managed investment strategies in these ETF vehicles without the daily holdings disclosure requirement of fully transparent ETFs.

“The approval of semi-transparent proxy basket ETFs opens a new avenue for active managers to offer investment strategies, while protecting its intellectual property,” said Frank Koudelka, global ETF product specialist at State Street.

State Street said it would provide services including basket creation, dissemination, settlement, custody, financial reporting, fund accounting, order-taking, performance and investment analytics and transfer agency services to Fidelity’s new suite of funds.

“Leveraging our heritage of active management, we believe that our new active equity ETFs and methodology will help asset managers offer differentiated strategies that had previously been unavailable in the ETF investment wrapper,” said Greg Friedman, Fidelity’s Head of ETF Management and Strategy.”

State Street has serviced ETFs since their inception more than twenty years ago. According to bank literature, it is the largest global ETF servicer, servicing close to 70% of US ETF assets, and is the only provider serving all major ETF regions.