Investment management firm Fidelity International announced the launch of the Fidelity Global Equity Research Enhanced PAB UCITS ETF, a new fund aimed at investing in global equities to achieve income and capital growth, while aligning with the climate goals of the Paris Agreement by restricting the carbon emissions exposure of its portfolio.
The new fund forms part of Fidelity’s Research Enhanced ETF range, which provide active exposure through the firm’s research capabilities to investments using fundamental analysis and forward-looking sustainability assessments.
Classified as Article 9 under the EU’s SFDR regulation, the new ETF is the first equity fund in the Research Enhanced range to follow the Paris-Aligned Benchmark (PAB) framework. Indices that are labelled as PABs under EU rules must meet criteria for asset selection that results in the index aligning with the long-term climate goals of the Paris Agreement. Criteria include a minimum reduction in greenhouse gas (GHG) emissions intensity of at least 50% compared to the market index, with annual GHG emissions intensity reductions of at least 7%.
Jenn-Hui Tan, Chief Sustainability Officer at Fidelity International said:
“Sustainability remains a core consideration for many of our investors, and we are seeing increased demand for a greater range of options to express their sustainability preferences. This natural evolution of our product range provides more choice and greater transparency for those clients seeking to integrate climate objectives alongside financial goals in their investment portfolios.”
According to Fidelity, the new actively managed fund will reference the Solactive ISS ESG Screened Paris Aligned Developed Markets USD Index NTR as its benchmark, and will use a combination of quantitative and fundamental research to select and weight securities to maximize return relative to the benchmark, align with the carbon emissions performance of the benchmark, and will also tilt towards securities with higher ESG ratings.
Neil Davies, Head of ETF Product & Capital Markets for Europe and Asia Pacific at Fidelity International said:
“At Fidelity, we’re proud to bring our clients a broad and growing range of active ETFs that tap into the depth of our global research and investment expertise. This addition to our Research Enhanced ETF range provides clients even greater choice across asset class, geography and sustainability preference, all utilising the active insights from Fidelity’s global investment platform aiming to deliver market beta and alpha at a competitive price.”
