Fidelity International announced the launch of first ESG world equity fund to enhance its equity fund range.
The fund aims to achieve long-term capital growth by focusing on companies that maintain strong environmental, social and corporate governance (ESG) credentials. It aims to deliver a portfolio with an attractive ESG profile, higher average ESG score and a lower weighted average carbon intensity compared to that of the broader market.
The fund, which launches with an AUM of just $80m, is constructed using Fidelity International’s fundamental bottom-up research process which is skewed towards companies with the highest ESG rating. In addition, its investment universe will be screened to exclude companies that derive a significant portion of business revenue from activities which typically have negative ESG outcomes; these activities can include the manufacture or distribution of alcohol, weapons, firearms, tobacco, gambling and adult entertainment. The fund also implements controversial weapons exclusion list.
The fund is not constrained by company size, sector or geographical allocations. Instead, companies are selected using a stringent bottom-up selection process implemented by managers Matt Jones and Hiten Savani, who collectively have over 32 years’ investment experience.
Hiten Savani, co-portfolio manager, Fidelity Funds – First ESG all country world fund, commented: “Our fully active investment process is designed to leverage the alpha generating potential of Fidelity’s global research platform, while offering investors access to a robust and measurable ESG approach.”
Steve Edgley, head of Institutional for Continental Europe, added: “As the regulatory environment continues to evolve and investors look to invest responsibly, many of our clients are looking for innovative and robust approaches to enable them to implement ESG portfolios while continuing to achieve their risk adjusted return objectives. We have designed the Fidelity first ESG approach specifically to allow clients to achieve these two goals.”