Fidelity Sustainable USD Corporate Bond Paris-Aligned Multifactor UCITS ETF ACC-GBP (hedged)
| Issuer: Fidelity International |
| Asset Class: Fixed Income |
| TER: 25bps |
| Trading Currency: GBP |
| Pays Income: False |
| Listing Date: 23 Oct 2023 |
| Ticker: FUIP |
| ISIN: IE000X3MDCC5 |
This actively managed fund offers a solution for investors seeking core exposure to the US investment-grade corporate bond market with a strong emphasis on sustainability and climate action. It combines a multifactor credit selection process with stringent climate-related objectives aligned with the Paris Agreement. This approach seeks to deliver a compelling risk-adjusted return profile while actively contributing to the decarbonization of the economy. The strategy focuses on companies that are not only financially sound but are also demonstrating credible commitments to transitioning towards a low-carbon future.
The fund's methodology is distinctive, employing a quantitative, multifactor model to select bonds by analysing factors such as value, quality, and momentum. It applies two key sustainable overlays: adherence to the EU Paris-Aligned Benchmark (PAB) criteria, targeting a 50% reduction in carbon intensity and annual self-decarbonization, and a proprietary “resolution enhancement” framework. This involves a forward-looking analysis of a company's climate commitments and transition plans, favouring those with credible strategies and engaging with those that need to improve.
This dual approach of quantitative screening and qualitative, forward-looking climate assessment makes the fund a sophisticated tool for sustainable fixed-income investing. It offers investors the potential for income and capital appreciation from a diversified portfolio of US corporate bonds, while simultaneously aligning their capital with ambitious climate goals. The active management allows for flexibility to navigate changing market conditions and credit cycles, and to dynamically adjust the portfolio based on the evolving climate transition landscape, making it suitable for those who want their fixed-income allocation to deliver both financial returns and a measurable environmental impact.
