Fidelity International launches new sustainable ETFs
Fidelity International (Fidelity) is extending the breadth of its Sustainable Family range of funds with the launch of three actively managed ESG ETFs.
Consisting of three core regional equity indices: Global, US and Europe, the Fidelity Sustainable Research Enhanced Equity ETFs provide investors broad equity market exposure comprised of companies that Fidelity favours from a sustainable and fundamental perspective.
The ETFs employ a systematic active strategy and leverage Fidelity’s proprietary analyst research. Companies are selected and weighted in favour of those that Fidelity has identified as having a positive fundamental outlook and strong sustainability credentials, using Fidelity’s Sustainable Ratings1. The portfolios typically consist of 250 - 500 stocks, depending on geographical region, and will be rebalanced quarterly.
Competitively priced with OCFs of 0.30 per cent-0.35 per cent, the ETFs will commence trading on Wednesday, 3 June on the London Stock Exchange and Deutsche Börse Xetra.
Fidelity Sustainable Research Enhanced Equity ETFs form part of Fidelity’s Sustainable Family range of funds, which currently consists of five products; two sustainable thematic funds focusing on carbon reduction and water and waste as well as three best-in-class equity and fixed income funds.
Nick King, Head of ETFs, Fidelity International, comments: “Incorporating sustainable investing principles is a key priority for many of our clients. We recently launched our proprietary sustainability ratings which draw upon the assessments of more than 1602 research analysts and the expertise of our dedicated ESG team. This is one of the biggest in-house research teams globally and our analysts conduct in excess of 15,0003 company meetings each year. This deep corporate access gives us the opportunity to engage directly with companies we invest in and provides a truly forward-looking view of the factors impacting a company’s ESG credentials and trajectory.
“These new ETFs provide an enhanced beta exposure by leveraging both our proprietary ESG ratings and our fundamental research insights to select and weight securities, whilst seeking to capture the characteristics of the broader market. We believe these are cost-effective and differentiated products aligned to the needs of ESG conscious investors.”
Jenn-Hui Tan, Global Head of Stewardship and Sustainable Investing, Fidelity International, adds: "Sustainable investing has proven to be one of the most significant shifts in asset management in a generation, heightened by increasing evidence that ESG investing can enhance financial returns. This trend was reaffirmed in our own research4 where stocks with higher ESG ratings outperformed lower rated stocks during the recent Covid-19 induced market sell-off.
“In line with our fiduciary duty and in response to our clients’ demands, we have been substantially increasing our focus on sustainable investment over recent years, including the launch of our Sustainable Ratings and Sustainable Family fund range. These new ETFs represent a key development in our capabilities by offering investors an enhanced ESG profile and low-cost access to Fidelity’s high-conviction analyst views.”
Lida Eslami, Head of Business Development, ETP and IOB, London Stock Exchange, says: “We congratulate Fidelity on the listing of their Fidelity Sustainable Research Enhanced Equity ETFs on London Stock Exchange. Public awareness of environmental issues has never been greater, and ETFs are an increasingly efficient way for investors to incorporate sustainable investment objectives into their portfolios. London Stock Exchange is a leading ETF listing and trading venue and offers investors a wide range of innovative products, enabling them to diversify and choose funds suited to their strategies.”