Alternative Investments/ESG: Fidelity Launches ETF Focused On Sustainable Emerging Market Companies

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The equity ETF is a useful route to emerging markets exposure as well as ESG.

Joyce Chang, chair of global research at JPMorgan, told CNBC’s “Street Signs Asia” on Thursday that stocks in emerging markets “were very under-owned.”

This was in the context of the overall rally in the equity markets. She added that there was scope for a “catch-up in 2021 for emerging markets.”

They could rise as much as 20% in 2021, she felt.

Furthermore, emerging markets may be the next beneficiary of the pandemic bull market, according to Bloomberg. That’s because investors are choosing to diversify their money away from the stratospheric levels in the U.S.

“It’s Goldilocks for emerging markets’ under-invested assets as we go into 2021,” said Deutsche Bank AG’s Sameer Goel, the bank’s head of emerging markets macro research in Singapore, as quoted by Bloomberg. They “have considerable cyclical catch-up potential.”

A recently launched ETF from Fidelity provides exposure to stocks in emerging markets, albeit with a sustainable skew. So investors can get exposure to two strong trends in one ETF.

Fidelity Sustainable Research Enhanced Emerging Market Equity ETF

The Fidelity Sustainable Research Enhanced Emerging Market Equity ETF provides investors with emerging market equity exposure to companies that stand out from a sustainable and fundamental perspective.

The ETF charges an OCF of only 0.50% and is trading on the London Stock Exchange and Deutsche Börse Xetra from November 26. (ETF Express)

The fund is an extension of Fidelity’s Sustainable Research Enhanced Equity ETF range. That range came in June this year. The range comprises three core regional equity indices: Global, US, and Europe. These funds, including the emerging market ETF, form part of Fidelity’s Sustainable Family range of funds.

EM+ESG

Nick King, Head of ETFs, Fidelity International, said: “Our new Sustainable Research Enhanced ETF range offers investors a cost-effective and differentiated product aligned to their growing ESG requirements. We’ve seen a good level of interest since the launch in June, and I am happy we can now offer clients an emerging market building block to implement their regional views. We hope to expand the range further in the coming months.”

Related Story:    Here’s FRDM, The ETF With A Conscience                                              

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