Fidelity Converting $13.5B in Mutual Funds to ETFs

Fidelity Investments is converting six mutual funds holding $13.5 billion in assets into exchange-traded funds, a quantum leap from its previous transition, as the move toward the more flexible exchange-traded format accelerates.

Boston-based Fidelity, which manages $4.2 trillion and is the world’s fourth biggest asset manager, is converting a batch of actively managed funds, which charge higher fees and are growing in popularity as investors seek returns that beat broad markets.

Fidelity converted $427 million into ETFs this month under a plan announced in November, and this latest $13.5 billion batch represents a massive expansion of its strategy. ETFs are widely seen as having liquidity, tradability and tax advantages over mutual funds, and have been adding assets while mutual funds are shedding them.

“Conversions represent one option for traditional mutual fund managers to enter the faster growing ETF space,” CFRA’s Head of ETF Data and Analytics Aniket Ullal told etf.com in an email. “While conversions will accelerate the growth of ETFs at the expense of traditional mutual funds, the latter will continue to be important in areas such as defined contribution plans, where traditional funds are still dominant.”

Around $71 billion in mutual funds have switched over into exchange-traded funds since the first was done in 2021, Ullal said. That total may swell to $1 trillion over the next decade or so, Bloomberg ETF analyst Eric Balchunas has estimated. Asset managers including JPMorgan Chase & Co. and Dimensional ETFs are among companies that have swapped mutual funds into ETFs.


Active ManagementFidelity, with $35.9 billion held in 58 U.S.-traded ETFs, is also aiming at the rapidly growing actively managed field. Actively managed ETF inflows surged 45% in May to $8.4 billion, according to Morningstar. Flows into active funds made up about a quarter of all May ETF inflows, despite the category comprising about 5% of total exchange-traded fund assets.

Fidelity will convert the following mutual funds, according to a filing:

International Enhanced Index Fund (FIENX) will become Enhanced International ETF

Large Cap Core Enhanced Index Fund (FLCEX) will become Enhanced Large Cap Core ETF

Large Cap Growth Enhanced Index Fund (FLGEX) will become Enhanced Large Cap Growth ETF

Large Cap Value Enhanced Index Fund (FLVEX) will become Enhanced Large Cap Value ETF

Mid Cap Enhanced Index Fund (FMEIX) will become Enhanced Mid Cap ETF

Small Cap Enhanced Index Fund (FCPEX) will become Enhanced Small Cap ETF.


Contact Ron Day at or follow him on Twitter at @RonDayETF

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