Alternative Investments/ESG: Fidelity Launches Paris-Aligned Corporate Bond ETFs
Fidelity launches income ETFs classified as Article 9 under the Sustainable Finance Disclosure Regulation.
Fidelity International has recently introduced two active fixed income ETFs, the Fidelity Sustainable EUR Corporate Bond – Paris Aligned Multifactor UCITS ETF and the Fidelity Sustainable USD Corporate Bond – Paris Aligned Multifactor UCITS ETF. These ETFs, categorized as Article 9 under the Sustainable Finance Disclosure Regulation, were listed on the London Stock Exchange and Xetra on October 23.
The primary objective of these funds is to align with the goals of the Paris Agreement in terms of carbon emissions. Both ETFs feature an ongoing charges figure (OCF) of 0.2%, which increases to 0.25% for the currency hedged versions. The USD fund will be tracking the Solactive USD Corporate IG PAB Index, while the EUR fund will follow the Solactive Euro Corporate IG PAB Index. These Solactive benchmarks have a self-decarbonisation trajectory of at least 7% annually, with biannual reviews in January and July.
Fidelity already offers two other Article 9 ETFs: the Fidelity Sustainable Global Corporate Bond Paris-Aligned Multifactor UCITS ETF and the Fidelity Sustainable Global High Yield Bond Paris-Aligned Multifactor UCITS ETF.
Stefan Kuhn, head of Europe ETF distribution, highlighted the significant growth in the ETF market, from $200 billion in 2003 to $9.5 trillion in 2022. Fidelity has experienced success with its Sustainable Global Corporate Bond Multifactor UCITS ETF, which has attracted clients seeking best-in-class corporate bonds at an attractive price point. Fidelity’s expansion of this strategy to include regional variations aligns with growing client demand.
As of June 2023, Fidelity manages assets totaling $744.8 billion. Additionally, in September, the firm launched two active Article 9 funds, namely, The Fidelity Funds Sustainable Global Equity fund and the Fidelity Funds Sustainable Asian Focus fund.
Related Story: Fidelity Debuts Climate-Focused, Global Bond ETF In Europe
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