Fidelity International today announces growth of its Sustainable Family of Funds with the launch of the Fidelity Funds — Sustainable China A Shares Fund, providing investors access to China’s onshore growth story. China’s onshore equity market offers unique opportunities that cannot be accessed elsewhere, including exposures to ‘New China’ and its ‘Digital Economy’, while the China A-share market has, historically, exhibited low return correlations with global equity markets.
The Fund is part of the Fidelity Sustainable Family of Funds and adopts a sustainable focused strategy, using an enhanced investment framework whereby a minimum of 70% of its net assets will be invested in securities deemed to maintain sustainable characteristics, which are defined as MSCI AAA-BB, or if unrated by MSCI, rated A-C by Fidelity for sustainability. Other criteria, such as enhanced exclusion categories, also apply.
Managed by experienced investors in Chinese and Asian equities, Victoria Mio, Ben Li, Yuanlin Lang and Theresa Zhou, the Fund aims to achieve long-term capital growth by investing primarily in companies that are listed or traded on stock exchanges in China, tapping into various secular investment themes. These include the ‘Chinese consumption’ story, driven by macroeconomic and demographic trends, as well as structural shifts in consumer lifestyles and preferences, and ‘Chinese healthcare’, companies innovating to better meet patients’ needs and facilitate improved quality of life. A ‘cyclical segment’ will also fit within the portfolio, positioned to benefit from China’s manufacturing industry moving up the value chain and the consolidation and upgrading of fragmented industrial sectors. Part of this segment includes China’s journey on its low-carbon development pathway, which will benefit sectors like renewable energy and electric vehicles
The Fund operates a structured, ongoing ESG engagement and voting strategy, with the aims of influencing positive change in corporate behaviour, efficient capital allocation, and appropriate risk management. To facilitate this, Fidelity’s analysts undertake over 1,500 company meetings with Chinese companies every year, conducting purposeful, two-way dialogues with specific and targeted objectives.
Commenting on the launch, John Clougherty, Head of UK Wholesale, Fidelity International said: “At Fidelity International, we seek to provide world-class investment solutions to suit the evolving needs of our clients. We believe the launch of the Fidelity Funds – Sustainable China A Shares Fund helps us meet our growing client demand for two investment solutions: access to the Chinese A-share market and sustainable investing. This unique offering will capitalise on our belief that, over the long run, China’s onshore equity market should benefit from strong capital inflows from both domestic and international investors and the potential long-term impact sustainability factors have on the value of companies.
“Our Sustainably Family of Funds has proved popular with investors and since launch in 2019, we have over 30 products available today. This new launch is part of our wider commitment to further grow the range, offering our clients increased thematic and regional funds across equity, fixed income and multi asset.”