Alternative Investments/ESG: Fidelity Launches Sustainable Climate Solutions Fund

The fund focuses on carbon reduction, not carbon avoidance.

The Fidelity Funds Sustainable Climate Solutions Fund will give investors exposure to companies engaged in the design, manufacture or sale of products such as electric vehicles, green hydrogen and renewable energy. To be managed by Velislava Dimitrova and Cornelia Furse, the new fund is classified Article 8 under the EU Sustainable Finance Disclosure Regulation. (Money Marketing)

Fidelity Sustainable Climate Solutions Fund

A minimum of 70% of the fund’s net assets will be invested in securities of companies that maintain sustainable characteristics as defined by Fidelity’s sustainable investing framework.

The fund will hold around 40-60 companies that actively enable global decarbonisation efforts such as the sectors of electric vehicles, green hydrogen, autonomous vehicles, renewable energy, smart grids, industrial automation and agricultural efficiency.

The fund levies an entry charge of 5.25%, while exit charges are nil. Ongoing charges are 1.95% annually.

Fidelity: Growth that will overshadow the internet revolution

Velislava Dimitrova, lead at portfolio manager, Fidelity International, said: “Climate change has prompted decarbonisation policies around the world to help achieve global carbon neutrality. The world needs to decarbonise urgently, at a faster pace that we have seen to date, and investors can play a major role in supporting this change.”

“The decarbonisation challenge is on a scale unmatched in human history. But it is one that offers the companies meeting it a 30-year period of growth that surpasses even the internet revolution. Our Sustainable Climate Solutions Fund offers investors access to this long-term global megatrend.”

A focus on low emission sectors is not enough

Cornelia Furse, co-portfolio manager atFidelity International, added: “Unlike other climate funds, we focus on carbon reduction, not carbon avoidance. Investing in low emission sectors will not be enough to reverse 150 years of rising greenhouse gas emissions. Our fund will identify and invest in existing and emerging solutions that help decarbonise society.”

“The decarbonisation trend is currently at the early stage of penetration and will be driven by a combination of innovation, improving economics, accelerated governmental support and changing consumer behaviours. It is the stocks exposed to these themes that will drive superior investment opportunities for our investors.”

Related Story: Fidelity Expands ESG Funds Lineup With Mutual Funds, ETFs, And A Bond Fund

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