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Fidelity International launches Sustainable Active Fixed Income ETFs

Fidelity International is further extending the breadth of its Sustainable ETF range with the launch of its first fixed income exchanged traded funds:

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Fidelity Sustainable Global Corporate Bond Multifactor UCITS ETF and Fidelity Sustainable USD EM Bond UCITS ETF.

The new ETFs, which are classified Article 81 under the EU Sustainable Finance Disclosure Regulation, employ a systematic active strategy and leverage Fidelity’s proprietary analyst research. The ETFs form part of Fidelity’s growing Sustainable Family range of funds which are underpinned by a strong focus on engagement, exclusion and proprietary research. The funds adopts a sustainable focused strategy under which a minimum of at least 70% will be invested in securities of companies that maintain sustainable characteristics.

Fidelity Sustainable Global Corporate Bond Multifactor UCITS ETF aims to deliver a sustainable enhanced global corporate bond exposure where the security selection is driven by Fidelity’s proprietary multifactor credit model combined with integrated sustainability criteria. Developed by Fidelity’s systematic fixed income team, the model seeks to identify bond issuers with potential enhanced idiosyncratic potential returns. First, the quantitative process considers a variety of sentiment, valuation, fundamental and ESG scores to deliver each bond issuers overall factor. The portfolio construction process then aims to generate alpha by selecting the most attractive bonds (based on transactions costs and valuation metrics) from those bond issuers with the highest multi-factor scores.

Fidelity Sustainable USD EM Bond UCITS ETF offers an active sustainable emerging market sovereign debt exposure through an enhanced weighting to countries most favoured by Fidelity’s Emerging Market debt factors heatmap, and an improved sustainable footprint based on Fidelity’s Sustainable proprietary ratings

Fund Ticker ISIN OCF Comparative market index
Fidelity Sustainable Global Corporate Bond Multifactor UCITS ETF Inc FSMF IE00BM9GRM34 0.25% Bloomberg Barclays Global Aggregate Corporate Index
Fidelity Sustainable USD EM Bond UCITS ETF Inc FSEM IE00BM9GRP64 0.45% JP Morgan ESG EMBI Global Diversified Index

The funds are competitively priced with an Ongoing Charge Figure (OCF) of 0.25% for Global Corporate Bond Multifactor and 0.45% for USD EM Bond. The ETFs will commence trading on 29 March on the London Stock Exchange, Deutsche Börse Xetra and the Swiss Stock Exchange, SIX.

Having launched its first European ETF in 2017, Fidelity has amassed over $2 billion in asset under management across its Quality Income and Sustainable Research Enhanced Equity ETF ranges.

Nick King, Head of ETFs, Fidelity International, comments: “I am delighted to expand our ETF range with the launch of our first fixed income exchange traded products. Incorporating sustainable investing principles has become the key priority for many of our clients globally and we can now offer access to our proprietary research capabilities across asset classes in a transparent, cost effective structure.

 “Combining the very best of Fidelity’s active research platform and sustainability expertise with best-in-class portfolio construction techniques, our Systematic Fixed Income can create low-cost portfolios tailored to our clients’ specific needs.

 “I’m pleased we can now offer our ESG conscious investors truly differentiated, cost effective Sustainable ETF solutions across asset classes.”

Source: ETFWorld

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