Fidelity International has expanded its Sustainable Family range of funds with the launch of three new actively managed environmental, social and corporate governance (ESG) exchange-traded funds (ETFs).
Consisting of three core regional equity indices; Global, US and Europe, the Fidelity Sustainable Research Enhanced Equity ETFs are designed to “provide investors broad equity market exposure comprised of companies that Fidelity favours from a sustainable and fundamental perspective”.
Fidelity said companies will be selected and weighted in the indices in favour of what the investment manager has identified as having “a positive fundamental outlook and strong sustainability credentials”.
The portfolios will consist of 250-500 stocks, depending of geographic region, and will be rebalanced quarterly.
The indices began trading on Wednesday on both the London Stock Exchange and the Deutsche Börse Xetra.
The new ETF launches take Fidelity’s Sustainable Family range to five products; two sustainable thematic funds focused on carbon reduction and water and waste as well as three equity and fixed income funds.
"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 research where stocks with higher ESG ratings outperformed lower rated stocks during the recent [coronavirus] induced market sell-off”, said Jenn-Hui Tan, Fidelity’s global head of stewardship and sustainable investing.
“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”, Tan added.