Capital Group Announces Licensing Agreement With Fidelity Investments

LOS ANGELES, April 30, 2021 /PRNewswire/ — Capital Group, home of American Funds and one of the world’s largest investment management…

LOS ANGELES, April 30, 2021 /PRNewswire/ — Capital Group, home of American Funds and one of the world’s largest investment management firms, has filed an application for exemptive relief with the Securities and Exchange Commission based on Fidelity’s active equity ETF methodology.

Earlier this year, Capital Group announced it will offer the firm’s first actively managed exchange-traded funds (ETFs). Capital Group plans to launch both equity and fixed income ETF strategies early in 2022.

«ETFs will be an important extension to our current suite of investment solutions,» said Holly Framsted, CFA, head of ETFs, Capital Group. «Fidelity’s innovative structure is one of the solutions we’ll consider as we plan for a robust ETF launch in early 2022.»

Fidelity’s active equity ETF model employs a «tracking basket» methodology which maintains the benefits of the ETF structure, provides information to market participants to promote efficient trading of shares, and preserves the ability to add value through active management.

«We are excited for the opportunity to partner with Capital Group,» said Fidelity’s Head of ETF Management and Strategy Greg Friedman. «Fidelity is committed to the active equity ETF space, and our innovative methodology is designed to operate seamlessly within the existing ETF market.»

Since its founding in 1931, Capital Group has evolved its offerings, starting with mutual funds and expanding into other services, including target date funds, Luxembourg funds, model portfolios, collective investment trusts and separately managed accounts.

«As we pursue superior long-term investment results for our investors, the introduction of ETFs continues our strategy of expanding choice for financial professionals, increasing their ability to select the vehicle most appropriate for their client’s long-term goals,» added Framsted.

About Capital Group

Celebrating its 90th anniversary in 2021, Capital Group, home of American Funds, has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research and individual accountability. As of December 31, 2020, Capital Group manages more than $2.3 trillion in equity and fixed income assets for millions of individuals and institutional investors around the world.  

Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.

For more information, visit capitalgroup.com.

For more information, contact:

Hannah Coan, Capital Group

ph: 213.615.5199

Email: Hannah.Coan@capgroup.com

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.

All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.

Use of this website is intended for U.S. residents only.

American Funds Distributors, Inc., member FINRA

This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.

© 2021 Capital Group. All rights reserved.

The «tracking basket» methodology maintains confidentiality of a portfolio’s securities and trading strategies by disclosing a «tracking basket» comprised of select recently disclosed portfolio holdings, liquid U.S. ETFs that convey information about the types of instruments in which the fund invests, and cash and cash equivalents. This «tracking basket» is disclosed daily and is used to facilitate the creation and redemption process. Each ETF’s portfolio holdings will be disclosed on its website on a monthly basis with a 30-day lag.

No products or investment vehicles offered by CAPITAL GROUP are sponsored, endorsed, sold, or promoted by FIDELITY or any of its affiliates.

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SOURCE Capital Group