Fidelity Investments launched its first ETF share classes on June 18, 2026, adding exchange-traded versions of three established mutual fund strategies to its lineup: the Fidelity Intermediate Municipal Income ETF (FIMU), the Fidelity Real Estate Income ETF (FREI), and the Fidelity Short-Term Bond ETF (FSTB).
Each ETF share class is built on an existing mutual fund strategy, sharing the same portfolio, track record, and investment management team, according to Fidelity’s announcement. The three funds are listed on the Nasdaq and available to individual investors and advisors on Fidelity’s platform.
ETF share classes offer investors benefits that mutual funds don’t provide. By adding an ETF wrapper to a mutual fund, asset managers allow both traditional and exchange-traded versions of the same strategy to coexist under one portfolio umbrella. Compared to mutual funds where net asset value is settled after the market close, the ETF structure enables intraday trading, potential tax efficiency through in-kind creation and redemption mechanisms, and in many cases lower expense ratios, according to InvestmentNews analysis.
The three new Fidelity products come with competitive expense ratios. FIMU carries an estimated net expense ratio of 0.30%, FREI charges 0.57%, and FSTB, the short-term bond strategy, will charge 0.20% on a net basis, according to Fidelity’s official announcement.
Existing Fidelity mutual fund shareholders on the company’s platform will have the option to convert their holdings to the ETF share class on a recurring, non-taxable basis. Greg Friedman, head of ETFs at Fidelity, said the company is “at an inflection point in the ETF industry, with exemptive relief providing the opportunity to offer additional product choice for investors.”
Why the timing matters
Fidelity’s entry into ETF share classes marks a significant industry shift. For decades, Vanguard was the only firm permitted to run ETF share classes within mutual funds, protected by a patent that expired in May 2023. After that expiration, nearly 80 fund managers filed petitions with the U.S. Securities and Exchange Commission for exemptive relief to add ETF share classes of their own, according to ISS Market Intelligence.
The SEC’s approval of Dimensional Fund Advisors’ application in September 2025 became the starting gun for other asset managers. Dimensional’s approval was significant because it was the first SEC clearance for an actively managed strategy to use the ETF share class structure. Following that decision, more than 60 sponsors re-filed share class relief applications, according to a Brown Brothers Harriman analysis cited by InvestmentNews.
Investor appetite for ETF share classes is strong. A 2024 ISS Market Intelligence survey found that 60% of advisors said they would prefer to access a favored manager in ETF form, versus just 15% who would opt for a mutual fund. A separate Brown Brothers Harriman global investor survey in March 2026 found that 86% of U.S. respondents said they would buy an ETF share class of a mutual fund if given the choice, according to InvestmentNews.
With these launches, Fidelity’s exchange-traded lineup expands to 84 ETFs and exchange-traded products with $172 billion in assets under management as of May 31, 2026. The company’s data shows that 53% of advisors’ portfolios included ETFs as of the fourth quarter of 2024, up from 44% the prior year, signaling the growing integration of ETF structures into professional investment strategies.
Sources
- Fidelity Newsroom — Official announcement of the three ETF share class launches, fund names, tickers, expense ratios, portfolio managers, and experience levels; launch date of June 18, 2026; non-taxable conversion option for existing mutual fund shareholders.
- InvestmentNews — Explanation of how ETF share classes work; Vanguard’s patent expiration in May 2023; nearly 80 fund managers filing for exemptive relief; Dimensional Fund Advisors’ September 2025 SEC approval as first for actively managed strategies; ISS Market Intelligence data on 60% of advisors preferring ETF form; Brown Brothers Harriman data on 86% of U.S. respondents willing to buy ETF share classes; Fidelity’s 53% advisor adoption of ETFs in Q4 2024 versus 44% prior year; more than 60 sponsors re-filing applications after SEC approval.
