Today, Fidelity Investments added two new equity ETFs to its ESG product suite, along with two equity ESG mutual funds and one bond ESG mutual fund. The funds, which are available to investors starting tomorrow, June 17, will use Fidelity’s semi-transparent active structure.
The two ETFs include the Fidelity Sustainability U.S. Equity ETF (FSST) and the Fidelity Women’s Leadership ETF (FDWM), which will follow similar strategies to two like-named Fidelity equity mutual funds, one of which is also launching today.
FSST and FDWM will track high-quality companies that are addressing climate change (either by corporate policy or through the products and services they offer); or that are advancing women’s leadership and development; or companies that have proven or improving sustainability practices, according to the release announcing the launch.
This brings the total number of ESG ETFs and mutual funds that Fidelity offers up to eleven.
“Investors are increasingly interested in aligning their values and priorities with their investment decisions. Fidelity’s new ESG mutual funds and ETFs offer these investors new ways to align their financial and personal goals,” said Pam Holding, Co-Head of Equity and Head of Sustainable Investing at Fidelity Investments, in the release. “Fidelity will continue to expand our sustainable investing solutions and resources to help our customers connect their financial goals to positive outcomes in the broader world.”
About FSST and FDWM
FSST will invest at least 80% of its assets in the stocks of U.S. companies that have proven or are improving their sustainability practices, based on Fidelity’s evaluation of those companies’ ESG profiles. The launch is accompanied by a mutual fund of a similar name and investment objective.
Meanwhile, FDWM will invest at least 80% of its assets in the stocks of companies that are prioritizing and advancing women’s leadership and development.
Eligible companies include those that include at least one woman on the senior management team; those that are governed by a board of directors for whom women represent at least one-third of membership; or companies that have, in Fidelity’s opinion, adopted policies that are designed to attract, retain, and promote women within their workforce.
Fidelity already offers a mutual fund with a similar name and investment objective to FDWM, the Fidelity Women’s Leadership Fund (FWOMX).
With these two launches, Fidelity now has nine ETFs in its product suite using its semi-transparent active model, in addition to five fully-transparent bond ETFs, 15 factor ETFs, 11 indexed sector ETFs, and the Fidelity Nasdaq Composite Index ETF (ONEQ).
Fidelity’s take on the semi-transparent active ETF structure uses a proprietary tracking basket methodology that conceals a fund’s daily holdings, while still allowing for the flexibility and intraday trading of the ETF vehicle. True portfolio holdings for the funds are published on a monthly basis.
Fidelity’s model has been licensed by several legacy asset managers, including Capital Group, Goldman Sachs Asset Management, Invesco, Hartford Funds, John Hancock Investment Management, and Putnam Investments.
As of the end of May, Fidelity had $10.8 trillion in assets under administration, including discretionary assets of $4.1 trillion.
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