Fidelity International (Fidelity) is expanding its sustainable strategies with the unveiling of five new Luxembourg-domiciled regionally focused portfolios.
Three fresh strategies are set to be launched immediately: Fidelity Funds – Sustainable Asia Equity Fund, Fidelity Funds – Sustainable European Smaller Companies Fund and the Fidelity Funds – Sustainable Japan Equity Fund.
The new funds are a response to growing demand for theme-based investment opportunities which aim to deliver long-term capital growth, and will be added to its "Sustainable Family of Funds".
The Sustainable Asia Equity Fund will invest in a diversified portfolio of sustainable stocks across Asia excluding Japan.
Its strategy will be overseen by lead portfolio manager, Dhananjay Phadnis. He will be supported by Flora Wang, Fidelity’s current director for sustainable investing, as an associate portfolio manager for this strategy. Ms Wang will act as a dedicated ESG specialist to develop a deeper integration of sustainability into Mr Phadnis’ investment process.
The Sustainable European Smaller Companies Fund targets opportunities in small and medium-sized European companies with attractive growth characteristics, above average returns, strong balance sheets and conservative accounting policies. Jim Maun is responsible for the fund as lead portfolio manager. He will be supported by co-portfolio manager, Joseph Edwards.
The Sustainable Japan Equity Fund is set to invest in Japanese companies with attractive growth characteristics, above average returns and strong balance sheets. The fund will be managed by Hokeun Chung, with the support of assistant portfolio managers, Tomohiro Ikawa, Cenk Simsek and Eddie Tajima.
In addition, two further investment opportunities will be launched by Fidelity in early 2021 across more markets: Fidelity Funds – China Innovation Fund and the Fidelity Funds – Global Thematic Opportunities Fund.
Threshold ESG ratings are applied to the sustainable family of funds. Each fund must have at least 70 percent of its holdings with MSCI-rated ESG scores of at least BBB or, if there is no MSCI rating, FIL ESG scores of at least C, while the remaining 30 percent must have improving ESG trajectories.
Christophe Gloser, head of sales, continental Europe, Fidelity International, said: “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 added: “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.”
