The new strategies are the Fidelity UCITS II ICAV – Fidelity Sustainable EUR Corporate Bond – Paris Aligned Multifactor UCITS ETF and the Fidelity UCITS II ICAV – Fidelity Sustainable USD Corporate Bond – Paris Aligned Multifactor UCITS ETF.
The investment objective for both ETFs is to provide income and capital growth, while aligning with the Paris Agreement long-term global warming objectives by restricting the carbon emission exposure of its portfolio.
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Both ETFs, developed by the firm’s systematic fixed income team, utilise a multifactor model that considers a variety of sentiment, valuation and fundamental insights.
The portfolio construction process then seeks to generate alpha by selecting the most attractive bonds — while also taking into account transactions costs and valuation — from bond issuers with the highest multi-factor scores.
The USD fund’s benchmark index is the Solactive USD Corporate IG PAB index, while the EUR fund’s is benchmarked against the Solactive Euro Corporate IG PAB Index.
The ongoing charges figure (OCF) for the newly-launched ETFs range is 0.25% for hedged share classes, and 0.20% for unhedged share classes.
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Stefan Kuhn, head of ETF distribution, Europe, said: “ETFs are growing in popularity as investors hunt for alternative vehicles that can deliver alpha. Indeed, the ETF market has grown from around $200bn globally in 2003 to more than $9.5trn in 2022 and is expected to reach $15trn 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.”
