The demand for active ETFs on the European market is growing and has reached a value of almost $50 billion in assets under management. To meet this demand, Fidelity International has decided to launch two new fixed income ETFs which expand its range of active sustainable ETFs.
TWO NEW ETFs
These are the Fidelity UCITS II ICAV – Fidelity Sustainable EUR High Yield Bond Paris-Aligned Multifactor UCITS ETF and the Fidelity UCITS II ICAV – Fidelity Sustainable USD High Yield Paris-Aligned Multifactor UCITS ETF, which were listed on Xetra, the Frankfurt stock exchange , and will soon be listed on the London Stock Exchange, on the SIX and on the Italian Stock Exchange. These funds are in addition to the Fidelity UCITS II ICAV – Fidelity Sustainable Global High Yield Bond Paris-Aligned Multifactor UCITS ETF, launched in November 2022 and which has already raised $800 million.
THE CONSTRUCTION OF SOLUTIONS
Fidelity’s two new funds invest in a portfolio composed mainly of debito corporate high-yield and sub-investment grade global issuers, who seek income and capital growth while pursuing alignment with the long-term goals of the Paris Agreement on global warming by limiting exposure to carbon emissions in their respective wallets. The two investment instruments are constructed and rebalanced through the application of Fidelity’s proprietary multi-factor model, based on the company’s quantitative fixed income research assets. The model aims to generate alpha systematically throughout the market cycle, while maintaining the fundamental characteristics of the asset class. It is designed to generate investment returns based on quantitative signals (factors) that aim to identify outperforming issuers by rigorously accounting for transaction costs.
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RESEARCH ABILITY
Alastair Baillie StrongHead of ETFs at Fidelity International, comments: “Thanks to Fidelity’s extensive research capabilities and proprietary investment insights, we are able to offer our clients a range of uniquely positioned active ETFs, with attractive exposures compared to pure index trackers, at an attractive cost. Since launching in 2021, our sustainable ETFs have proven popular with clients, reaching more than $5.7 billion in assets under management across 13 different active strategies to date.”
