Fidelity Sustainable EUR Corporate Bond Paris Aligned Multifactor UCITS ETF Inc

Issuer: Fidelity International

Asset Class: Fixed Income

TER: 20bps

Trading Currency: GBP

Pays Income: False

Listing Date: 23 Oct 2023

Ticker: FEIS

ISIN: IE000VQZQ963

This fund offers a sophisticated fixed-income solution for climate-conscious investors, targeting a portfolio of Euro-denominated, investment-grade corporate bonds. Its primary objective is to align with the Paris Agreement's goals of limiting global warming. The strategy achieves this by tracking an index that mandates a significant initial reduction in greenhouse gas (GHG) emissions intensity compared to the broader corporate bond market, coupled with a clear year-on-year decarbonization trajectory. This forward-looking approach ensures the portfolio remains on a path consistent with a low-carbon future, providing a tangible way to invest in corporate debt that supports climate action.

The underlying methodology adheres to the stringent criteria of a Solactive Paris-Aligned Benchmark (PAB). This involves systematically excluding companies engaged in controversial weapons, thermal coal, and other activities that are misaligned with the climate transition. Beyond these exclusions, the fund incorporates a proprietary multifactor approach developed by the manager. This additional layer actively tilts the portfolio towards issuers demonstrating stronger fundamental characteristics, such as value and quality, aiming to enhance risk-adjusted returns. This dual focus on achieving specific climate objectives while also leveraging financial factor insights distinguishes it from purely passive ESG strategies.

This instrument can serve as a core holding for investors seeking to decarbonize their fixed-income allocation without sacrificing broad exposure to the European investment-grade corporate bond market. It provides a potential source of regular income through its semi-annual distributions while contributing to measurable environmental progress. The integration of a multifactor model adds a layer of intelligent design intended to navigate market cycles effectively, making it a suitable choice for those looking to embed sustainability deeply within their investment framework.