Fidelity Investments launched its first exchange-traded fund share classes on June 18, 2026, adding three new ETF options to existing mutual fund strategies in municipal income, real estate, and short-term bonds. The new ETF share classes—Fidelity Intermediate Municipal Income ETF (FIMU), Fidelity Real Estate Income ETF (FREI), and Fidelity Short-Term Bond ETF (FSTB)—share the same portfolio and track record as their mutual fund counterparts, according to the company’s June 15 announcement.
The three funds carry estimated net expense ratios of 0.30% for FIMU, 0.57% for FREI, and 0.20% for FSTB, making them competitive offerings in their respective categories. The Intermediate Municipal Income fund invests at least 80% of assets in municipal securities exempt from federal income tax and is managed by co-portfolio managers Cormac Cullen, Michael Maka, and Elizah McLaughlin. The Real Estate Income fund, managed by Bill Maclay, invests at least 80% of assets in debt and income-producing equity securities of real estate companies. The Short-Term Bond fund, managed by Dave DeBiase, Robert Galusza, and John Mistovich, focuses on investment-grade debt securities maturing in five years or less.
Fidelity’s move represents a significant expansion of its ETF platform, which now consists of 84 ETFs and ETPs with $172 billion in assets under management as of May 31, 2026. Investors who currently own shares of the existing mutual funds on Fidelity’s platform have the option to convert their shares to the new ETF class on a non-taxable basis, a feature that makes the transition seamless for existing shareholders.
The ETF Share Class Trend Gains Momentum
Fidelity’s launch follows similar moves by other major asset managers seeking to capitalize on exemptive relief that allows mutual funds to offer ETF share classes. Dimensional Fund Advisors launched the industry’s first actively managed ETF share class in March 2026, while Thornburg Investment Management brought two actively managed ETF share classes to market in April 2026. Thornburg’s ETF platform has grown to over $600 million in assets since launching its first active ETFs in January 2025.
ETF share classes offer investors and existing mutual fund shareholders potential benefits through improved tax efficiency. According to J.P. Morgan, mutual fund investors can benefit from the ETF share class structure through improved tax efficiency, though outcomes are not guaranteed. The tax advantage stems from the ETF structure’s ability to process in-kind redemptions, which allows the fund to offload low-basis securities without triggering taxable capital gains distributions. This mechanism can protect mutual fund shareholders from unwanted tax liabilities when other investors redeem their shares. The ICI Investment Company Institute noted that dual share class structures may provide significant benefits, including economies of scale and tax-efficient transitions between product wrappers.
Sources
- Fidelity Newsroom — announced the launch of three ETF share classes on June 15, 2026, with details on fund objectives, portfolio managers, and expense ratios
- InvestmentNews — reported on the June 16, 2026 launch with expense ratio details for FIMU, FREI, and FSTB
- J.P. Morgan Asset Management — explained how mutual fund investors can benefit from ETF share class structures through improved tax efficiency
- ICI Investment Company Institute — outlined benefits of dual share class structures including economies of scale and tax efficiency
- Thornburg Investment Management — announced the April 2026 launch of two actively managed ETF share classes
- ETFGI — reported on Thornburg’s ETF platform growth to over $600 million in assets
