Fidelity International is adding to its range of climate-focused investment solutions with a new Paris-aligned sustainable exchange-traded fund (ETF).
Benchmarked against the Solactive Paris Aligned Global Corporate High Yield USD Index, the Fidelity Sustainable Global High Yield Bond Paris-Aligned Multifactor Ucits ETF is aligned with the objectives of the Paris Agreement of limiting global warming to 1.5 degrees.
It will also target a level of emission intensity that is 50% lower than an equivalent global market universe and will aim for an average decarbonisation rate of 7% per annum, in line with that required of the benchmark by the EU PAB Emission Reduction Requirements.
The objective of the ETF is to provide long-term growth and income by investing in a diversified portfolio of high-yield bonds, with input from Fidelity’s global research platform and the sustainable investing team.
It will also use Fidelity’s proprietary multi-factor model, which analyses bonds using quantitative multi-factor “signals” to identify issuers that outperform.
Those companies subject to UN Global Compact controversies or which operate in sectors such as weapons, thermal coal, oil sands, arctic oil and gas or tobacco production are automatically excluded from the strategy.
Nick King, head of ETFs at Fidelity International, said: “Reducing climate impact and supporting the Paris Agreement set out in 2015 are of the utmost importance for building a sustainable future, and the launch of this new ETF reaffirms Fidelity’s ambition in sustainable investing.”
He added: “We are convinced this new sustainable ETF will provide clients the opportunity to meet their financial goals and their climate objectives.”
The Fidelity Sustainable Global High Yield Bond Paris-Aligned Multifactor Ucits ETF commences trading on the London Stock Exchange and across Europe from 14 November.
The latest addition to Fidelity’s ETF lineup means the range now encompasses 18 differentiated solutions, including income, sustainable equity, sustainable fixed income and thematic.
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