Fidelity International has launched an Article 8 fund to tap into the “megatrend” of biodiversity.
The Fidelity Funds – Sustainable Biodiversity Fund will aim to provide investors access to a global equity portfolio of companies contributing to biodiversity preservation.
Managed by Velislava Dimitrova, the fund will seek to achieve long-term capital growth by investing in companies which contribute to the improvement of global biodiversity preservation in two ways.
The fund invests in the value chain of companies involved in providing ‘solutions’ to reduce biodiversity loss while also allocating capital towards biodiversity ‘best-in-class’ companies.
These are defined by the $665 billion firm as companies which are either market-leading in terms of their operational improvement to minimise the impact on biodiversity or companies developing new solutions to address biodiversity loss.
Dimitrova is also the lead portfolio manager on the €1.84bn Fidelity Funds – Sustainable Water & Waste and €19m Fidelity Funds – Sustainable Climate Solutions strategies.
The Article 8, or ‘light green’ fund will track the MSCI ACWI index and will typically hold between 40 and 60 positions.
Under the fund’s thematic strategy, 70% of the fund’s net assets will be invested in issuers that maintain sustainable characteristics, while at least 90% of the assets’ sustainable characteristics will be considered.
Dimitrova said: “In the past, market participants have taken nature for granted, viewing this capital stock as a perpetual resource. But evidence shows that nature continues to degrade as a result of human activity.
“The world is now waking up to the urgent threat to biodiversity and natural capital. Biodiversity investment solutions are emerging as the largest investment megatrend in our generation and provides opportunities for investors. The theme is at an inflection point, and belatedly transforming from a neglected risk into a top priority,” she added.
In September, AXA Investment Management launched an Article 9 ETF pairing that includes biodiversity themes.
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