Fidelity: New sustainable and thematic funds set to launch in 2021

24 november 2020

Fidelity International (Fidelity) is further expanding its Sustainable Family of Funds with the launch of three Luxembourg-domiciled regional focussed portfolios: Fidelity Funds – Sustainable Asia Equity Fund, Fidelity Funds – Sustainable European Smaller Companies Fund and the Fidelity Funds – Sustainable Japan Equity Fund.

In response to growing demand for theme-based investments, two new thematic Luxembourg-domiciled funds will also be launched in early 2021: Fidelity Funds – China Innovation Fund and the Fidelity Funds – Global Thematic Opportunities Fund.

Christophe Gloser, Head of Sales, Continental Europe, Fidelity International, comments: “Ultimately, our clients’ goals are fundamentally aligned with those of society and it is our place to ensure we represent them in the best way possible. Like them, we believe that by investing in companies which operate with high standards of sustainability we can protect and enhance investment returns for our clients.

“Our clients are also becoming increasingly theme-aware when taking their investment decisions. Last month we introduced our Fidelity Funds – Future Connectivity Fund and we’re pleased to now offer an even broader range of thematic funds capturing some of the most interesting megatrends in society, such as China Innovation.”

The Fidelity Sustainable Family currently consists of eight funds, including water & waste and carbon reduction sustainable thematic strategies, as well as two best in class equity funds, one best in class fixed income fund and three Enhanced Sustainability ETFs.

The Sustainable Family’s investment approach is underpinned by three pillars, centred around engagement, exclusion, and Fidelity’s proprietary research. This combines Fidelity’s focus on active engagement with an enhanced exclusion framework with the aim to ensure companies in which the funds invest meet certain sustainable standards and behave in a manner consistent with responsible investment values.

Jenn-Hui Tan, Global Head of Stewardship and Sustainable Investing, Fidelity International adds: “We have responded to our clients’ demands in recent years by substantially developing our in-house resources to scrutinise and map sustainability risks, including the introduction of our proprietary Sustainability Ratings which form the cornerstone of our ESG analysis. Our Sustainable Family has grown from five to eleven funds in just over a year, and I fully expect this trend to continue in line with rising regulatory focus and increasing client demand.”  

About the funds:

Sustainable Family:

For the Sustainable Family of Funds, threshold ESG rating criteria are applied: the fund must have at least 70% of its holdings in MSCI-rated ESG scores of at least BBB or, if there is no MSCI rating, FIL ESG scores of at least C, and the remaining 30% must have improving ESG trajectories. This is the minimum requirement for the Fidelity Sustainable Family of Funds; individual strategies may have stricter rules.

The Fidelity Funds – Sustainable Asia Equity Fund aims to deliver long-term capital growth through investment in a diversified portfolio of sustainable stocks across Asia excluding Japan. Lead Portfolio Manager, Dhananjay Phadnis has 18 years of investment experience and has been successfully managing funds since April 2008. He will be supported by Flora Wang our current Director for sustainable investing, as an Associate Portfolio Manager for this strategy. Flora will act as a dedicated ESG specialist for a deeper integration of sustainability into Dhananjay’s investment process.

The Fidelity Funds – Sustainable European Smaller Companies Fund aims to achieve long term capital growth by investing in small and medium-sized European companies with attractive growth characteristics, above average returns, strong balance sheets and conservative accounting policies. Lead Portfolio Manager, Jim Maun has over 20 years of investment experience and has been successfully managing funds since September 2008. He is supported by Co-Portfolio Manager, Joseph Edwards, who joined Fidelity as an Equity research Analyst in February 2012, before being promoted to Assistant Portfolio Manager in 2018.  

The Fidelity Funds – Sustainable Japan Equity Fund aims achieve long term capital growth by investing in Japanese companies with attractive growth characteristics, above average returns and strong balance sheets. The fund will be managed by Lead Portfolio Manager, Hokeun Chung, and experienced Japanese equity investor having held various roles as an analyst, research director and portfolio manager. He will be supported by Assistant Portfolio Managers, Tomohiro Ikawa, Cenk Simsek and Eddie Tajima.

New Thematic Funds

The Fidelity Funds – China Innovation Fund aims to deliver long term capital growth by investing in Chinese equites linked to the theme of innovation, such as technology innovation, lifestyle innovation and environmental innovation. The fund will be managed by Co-Portfolio Managers Tina Tian and Casey Mclean. Casey McLean joined Fidelity in 2015 as an Investment Analyst and has over 20 years of investment experience. Tina Tian also joined Fidelity in 2015 as an Investment Analyst and has over 11 years of investment experience.

The Fidelity Funds – Global Thematic Opportunities Fund aims to achieve long-term capital growth from a portfolio primarily made up of equity securities of companies throughout the world including emerging markets. The fund aims to invest in multiple long-term market themes by investing in securities that may benefit from structural and/or secular (i.e. long term and not cyclical) changes in economic and social factors, such as disruptive technologies, demographics and climate change. The fund will be managed by Lead Portfolio Manager, Nick Peters, and Co-portfolio Manager, Ayesha Akbar. Both Nick and Ayesha have substantial experience in selecting and combining equity managers and will be applying their deep experience to this thematic approach. Nick and Ayesha will work closely with Fidelity’s global equity research team and underlying portfolio managers, who will manage specific thematic strategies.

The value of investments and the income from them can go down as well as up so you may get back less than you invest.

The value of investments can be affected by changes in currency exchange rates if the fund invests in overseas markets.

The Investment Manager’s focus on securities of companies which maintain strong environmental, social and governance (“ESG”) credentials may result in a return that could, at times, compare less favourably to similar products without such focus. No representation nor warranty is made with respect to the fairness, accuracy or completeness of such credentials.  The status of a security’s ESG credentials can change over time.

Investments in emerging markets can be more volatile than other more developed markets.

Some funds have, or are likely to have, high volatility owing to their portfolio composition or the portfolio management techniques.

Some funds invest more heavily than others in smaller companies, which can carry a higher risk because their share prices may be more volatile than those of larger companies and the securities are often less liquid.

Investors should note that the views expressed may no longer be current and may have already been acted upon.