Fidelity Global Corp Bond Research Enhanced PAB UCITS ETF Inc (USD-Hedged)
| Issuer: Fidelity International |
| Asset Class: Fixed Income |
| TER: 30bps |
| Trading Currency: USD |
| Pays Income: False |
| Listing Date: 26 Oct 2022 |
| Ticker: FSMU |
| ISIN: IE0005E8N9I1 |
This actively managed fund offers a targeted approach to global fixed income, focusing on investment-grade corporate bonds that align with the climate objectives of the Paris Agreement. The core of the strategy is to provide investors with both income and the potential for capital appreciation by constructing a diversified portfolio of debt instruments from issuers around the world. By utilizing a proprietary multifactor model, the investment team systematically selects securities based on attractive value and quality characteristics, while simultaneously embedding stringent sustainability criteria into the process. This creates a portfolio designed to deliver a compelling risk-adjusted return profile within the corporate bond universe.
A standout feature of this investment is its commitment to sustainability, specifically its Paris-Aligned framework. The strategy aims for a substantial reduction in greenhouse gas emissions intensity compared to the broader market and seeks to achieve an annual self-decarbonization rate of at least 7%. This is accomplished by tilting the portfolio towards companies demonstrating a clear commitment to reducing their carbon footprint and excluding firms with significant involvement in controversial sectors such as thermal coal and unconventional fossil fuels. The fund integrates proprietary ESG ratings, ensuring that the underlying issuers not only meet climate goals but also exhibit strong governance and social practices.
For investors seeking to build a responsible core bond portfolio, this fund presents a comprehensive solution. It combines the potential for stable income from global corporate credit with a forward-looking approach to climate risk management. The active management provides the flexibility to adapt to evolving credit cycles and market dynamics. Furthermore, this specific share class is currency-hedged, which helps to mitigate the impact of exchange rate volatility between the portfolio's base currency and the trading currency, offering a more stable return stream for investors seeking to minimize foreign exchange risk.
