The European active Exchange-Traded Fund (ETF) market continues to show strong growth, with assets under management up 50% year to date and accounting for almost $50bn in the region. In response to rising demand, Fidelity International has announced that it is expanding its sustainable active ETF range with the launch of two fixed income ETFs.
The Fidelity UCITS II ICAV – Fidelity Sustainable EUR High Yield Bond Paris-Aligned Multifactor UCITS ETFand Fidelity UCITS II ICAV – Fidelity Sustainable USD High Yield Paris-Aligned Multifactor UCITS ETF (the “Funds”) list on Xetra today, with listings on the London Stock Exchange, SIX and Borsa Italiana to follow. The Funds complement the successful $800m** Fidelity UCITS II ICAV – Fidelity Sustainable Global High Yield Bond Paris-Aligned Multifactor UCITS ETF launched in November 2022.
Benefiting from Fidelity’s quantitative, fundamental and sustainability research, the Funds invest in a portfolio primarily made up of high-yielding, sub-investment grade corporate debt securities of issuers globally, seeking income and capital growth while aiming to align with the Paris Agreement long-term global warming objectives by restricting carbon emission exposure in their respective portfolios.
The Funds are built and rebalanced using Fidelity’s proprietary multifactor model, based on the firm’s heritage of fixed income quantitative research and datasets. The model seeks to systematically generate alpha throughout the market cycle, while preserving the core characteristics of the asset class. It is designed to deliver excess returns by investing based on quantitative signals (factors) that aim to identify issuers that outperform under strict considerations of transaction costs.
Alastair Baillie Strong, Head of ETFs at Fidelity International, comments: “By leveraging Fidelity’s extensive research capabilities and proprietary investment insights, we can offer our clients access to a range of uniquely positioned active ETFs that deliver enhanced exposures versus pure index trackers, at an attractive price point.
“Since launch in 2021, our Sustainable ETFs have proved popular with clients, growing to over $5.7bn assets under management across 13 different active strategies today***.”
Both Funds are classified as Article 9 under the Sustainable Finance Disclosure Regulation (“SFDR”).
