Fidelity Sustainable USD EM Bond UCITS ETF INC-USD
| Issuer: Fidelity International |
| Asset Class: Fixed Income |
| TER: 45bps |
| Trading Currency: GBP |
| Pays Income: False |
| Listing Date: 29 Mar 2021 |
| Ticker: FSED |
| ISIN: IE00BM9GRP64 |
This actively managed fund offers exposure to US dollar-denominated debt securities issued by governments, government-related entities, and corporations in emerging market countries. By employing an active strategy, the portfolio manager has the flexibility to navigate the complexities of emerging debt markets, seeking to identify opportunities and manage risks based on in-depth proprietary research. The investment process is not constrained by a benchmark, allowing for dynamic allocation across a diverse range of countries and credit qualities to capitalize on changing market conditions and uncover potential value that passive strategies might overlook.
A core component of the strategy is its deep integration of Environmental, Social, and Governance (ESG) criteria. The fund aims to invest in issuers with strong or improving ESG characteristics while maintaining a lower carbon footprint than its performance comparator. This is achieved through a multi-faceted approach that includes proprietary ESG ratings, analysis of ESG trajectories, and active engagement with issuers. The fund excludes exposure to certain sectors, such as thermal coal and controversial weapons, and avoids issuers involved in severe controversies. This forward-looking ESG framework seeks to identify sustainable investments that are well-positioned for long-term performance.
For investors, this product can serve as a core holding for those seeking higher potential yields and diversification benefits offered by emerging market debt, combined with the principles of responsible investing. The active management and robust ESG overlay aim to mitigate some of the inherent risks associated with developing economies, such as political instability and credit events, by focusing on more resilient and sustainable issuers. The fund's income-oriented share class, which distributes dividends monthly, may also appeal to those seeking a regular income stream.
