Though it is shying away from official confirmation, Fidelity Investments seems to be not-so-secretly building its long-awaited foray into the exchange-traded fund market out West, after hiring a new ETF gunslinger and creating a new division in Denver.

The new unit, called SelectCo, will be headed by former State Street Global Advisors senior managing director Anthony Rochte, who specialized in ETF products at State Street, which controls the market's second-largest offering of ETFs. Rochte re-joined Fidelity in March, becoming president of the then-unnamed unit that was to focus on specialized sector investments.

Previously, he was a vice president of investment services in Fidelity's institutional brokerage unit from 1996 to 2000. Earlier this year, Fidelity added to the ETF speculation when it filed with the Securities and Exchange Commission to be allowed to launch actively managed ETFs.

Fidelity has thus far missed out on the ETF boom, creating its first ETF-Fidelity Nasdaq Composite Index Tracking (ONEQ)-eight years ago but then never really made marketing of the fund a high priority. Indeed, Fidelity along with some other reticent mutual fund giants have watched from the sidelines as the assets in the ETF market almost tripled over the past five years. Now, with more than 1,500 ETFs representing more than $1.2 trillion in assets, according to data from the EFT Industry Association, large mutual fund firms may no longer be able to afford being absent from this market.

There has always been speculation that Fidelity would eventually see the wisdom in leveraging its highly respected sector funds into the ETF market, but thus far, the firm hasn't made strong moves in that direction -although the new division's name seems to implicitly suggest that outcome.

Despite the clues, Fidelity still isn't saying for sure that the SelectCo unit will be the mutual fund giant's ultimate ETF effort. "We are pursuing ways to enhance our focus on the rapidly growing sector investing market," said Jeff Cathie, a Fidelity spokesman. "To accomplish this, we recently established a new division that will focus exclusively on leveraging our current sector investment management expertise and scale to meet the evolving needs of our clients for more specialized sector portfolio investment options."

For the moment, the new division is being called SelectCo, Cathie said, but that is just an internal name which could change, if appropriate. At this time, the new unit is "not focused on specific products or investment vehicles," he added.