Fidelity Sustainable USD EM Bond UCITS ETF ACC GBP Hedged

Issuer: Fidelity International

Asset Class: Fixed Income

TER: 50bps

Trading Currency: GBP

Pays Income: False

Listing Date: 29 Mar 2021

Ticker: FEMP

ISIN: IE00BM9GRQ71

This actively managed fund offers a targeted approach to emerging market debt, integrating environmental, social, and governance (ESG) considerations into its core strategy. It seeks to deliver a combination of capital appreciation and income by investing primarily in hard currency bonds issued by governments, quasi-governmental agencies, and corporations across developing nations. The investment process is distinguished by its proprietary ESG rating system, which goes beyond simple exclusions. It actively seeks to identify issuers with strong or improving sustainability profiles, while avoiding those involved in controversial sectors or with poor ESG track records. This dual focus aims to capture the potential for higher yields and growth inherent in emerging markets while mitigating risks associated with weak governance or negative environmental and social impacts.

By employing an active management style, the portfolio managers have the flexibility to adjust holdings based on their macroeconomic outlook, credit analysis, and ongoing ESG assessments. This allows the fund to navigate the dynamic and often volatile landscape of emerging market debt, seeking to outperform its benchmark. The strategy is designed for investors looking for a sophisticated way to access the emerging market bond asset class, combining the potential for attractive returns with a commitment to responsible investing principles. It provides a core holding for those who believe that strong ESG characteristics are indicative of long-term financial resilience and performance.