Fidelity International, one of the largest mutual fund managers, has questioned the motives behind synthetic exchange-traded funds, claiming the instruments have “no regard" for the interests of retail investors.

Responding to a discussion paper from the European Securities and Markets Authority on guidelines for Ucits ETFs and structured Ucits, Dan Hedley, head of European regulatory policy at Fidelity International, said a number of "synthetic ETFs seem custom-made to feed into institutional trading strategies - rather than (indeed often never with any consideration for) - answering the needs of retail investors."