Fidelity International is expanding its ETF range with the launch of two active fixed income ETFs. The Fidelity UCITS II ICAV – Fidelity Sustainable EUR Corporate Bond – Paris Aligned Multifactor UCITS ETF and Fidelity UCITS II ICAV – Fidelity Sustainable USD Corporate Bond – Paris Aligned Multifactor UCITS ETF are both listed on the London Stock Exchange and Xetra today, with listings on SIX and Borsa Italiana to follow in the future.
Both funds benefit from the unique inputs of Fidelity’s global research platform, proprietary sustainable investing ratings, and a Paris Aligned climate commitment. Developed by Fidelity’s systematic fixed income team, the multifactor model which underpins the strategies, considers a variety of sentiment, valuation and fundamental insights. The portfolio construction process then aims to generate alpha by selecting the most attractive bonds (taking into account transactions costs and valuation) from those bond issuers with the highest multi-factor scores.
The investment objective of both Funds is to align with the Paris Agreement long-term global warming objectives by restricting the carbon emission exposure of its portfolio and to achieve income and capital growth.
The USD Fund’s benchmark index is the Solactive USD Corporate IG PAB Index and the EUR Fund’s benchmark index is the Solactive Euro Corporate IG PAB Index. Both funds are classified as Article 9 under the Sustainable Finance Disclosure Regulation (“SFDR”).
Stefan Kuhn, Head of ETF Distribution, Europe, at Fidelity International, comments: “ETFs are growing in popularity as investors hunt for alternative vehicles that can deliver alpha. Indeed, the ETF market has grown from around USD 200billion globally in 2003 to more than USD9.5 trillion in 2022 and expected to reach USD15 trillion in just five years.
“Since launch in 2021, our Sustainable Global Corporate Bond Multifactor UCITS ETF has proved popular with clients, utilising Fidelity’s active research platform and our sustainability expertise to identify best-in-class corporate bonds at an attractive price point. We are pleased to expand on this to include regional variations of the successful strategy, in line with client demand.”
The Funds join Fidelity’s existing selection of Article 9 ETFs, the Fidelity Sustainable Global Corporate Bond Paris-Aligned Multifactor UCITS ETF and Fidelity Sustainable Global High Yield Bond Paris-Aligned Multifactor UCITS ETF.
