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Fidelity Enhances Factor Lineup With International ETFs

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Fidelity Enhances Factor Lineup With International ETFs

Fund giant Fidelity recently expanded its lineup of smart beta exchange-traded funds with the addition of two international funds. The Fidelity International High Dividend ETF (NYSE:FIDI) and the Fidelity International Value Factor ETF (NYSE:FIVA) debuted last week.

Boston-based Fidelity offers two domestic dividend ETFs: the Fidelity High Dividend ETF (NYSE: FDVV) and the Fidelity Dividend ETF for Rising Rates (NYSE: FDRR). The firm also features a domestic value ETF, the Fidelity Value Factor ETF (NYSE: FVAL).

FIDI and FIVA could prove well-timed as investors continue flocking to international ETFs. Several of last year's top asset-gathering ETFs were ex-US funds and to this point in 2018, six of the top 10 asset-gathering ETFs are international funds.

A Look At The Dividend ETF

The Fidelity International High Dividend ETF tracks the Fidelity International High Dividend Index. That benchmark “is designed to reflect the performance of large and mid-capitalization developed international high dividend-paying stocks that are expected to continued to pay and grow their dividends,” according to Fidelity.

The new ETF holds 96 stocks, about 60 percent of which are European companies. The remainder of FIDI's portfolio is split between Asia and North America. Twenty countries are represented in FIDI with Japan, the UK and France combining for about 44 percent.

FIDI is top heavy at the sector level as financial services stocks account for over 32 percent of the fund's weight while consumer discretionary and energy names combine for another 31 percent. FIDI charges 0.39 percent per year, or $39 on a $10,000 investment.

More On The Value Play

The Fidelity International Value Factor ETF follows the Fidelity International Value Factor Index. That benchmark “is designed to reflect the performance of large and mid-capitalization developed international stocks that have attractive valuations,” according to Fidelity.

Over 89 percent of FIVA's geographic weight is allocated to European and Asian companies. Nineteen countries are represented in the new ETF, which holds nearly 110 stocks. The euro and yen represent almost 53.6 percent of FIVA's currency exposure.

Japan, the UK and France combine for about half of FIVA's country weight. The new ETF devotes 23.6 percent to financial services names and a combined 27 percent to industrial and consumer discretionary stocks. FIVA's top 10 holdings combine for 15.8 percent of the portfolio. The value ETF also charges 0.39 percent per year.

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