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Fidelity to Create New Sector Fund Board, Advisor

Rabobank finally settles on a buyer for most of Robeco, Fidelity to close Fidelity Small Cap Value, Matthews Asia to launch 2 new funds, and Victory Capital gains independence.

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Fidelity recently filed to create a new investment advisor, Fidelity SelectCo LLC, and to form a separate board of trustees to oversee its lineup of 64 actively managed sector-based Select funds. Both require approval from shareholders of the Select funds. Currently, the sector funds are overseen by the equity and high-income board of trustees, which has responsibility for an additional 170 diversified funds. It's not the first time Fidelity has created a separate board to oversee its broad lineup. In 2007, the firm separated the oversight of the equity and high-income funds from the investment-grade bond, money market, and asset-allocation funds. If approved, these changes will occur by August 2013. The sector funds' strategies, management teams, and fees aren't expected to be directly affected by the change.

The split hints at Fidelity's broader ambitions for its sector funds as it tries to catch up with competitors that have benefited from the tremendous asset growth of sector-based exchange-traded funds. Fidelity had held off on offering ETFs (other than its legacy Nasdaq ETF) but has filed for permission to launch both passive and actively managed equity and fixed-income ETFs.

Morningstar Fund Analysts does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.