Fidelity Sustainable Euro HY Bond Paris-Aligned Multifactor UCITS ETF EUR-Hedged ACC
| Issuer: Fidelity International |
| Asset Class: Fixed Income |
| TER: 35bps |
| Trading Currency: GBP |
| Pays Income: False |
| Listing Date: 24 Oct 2024 |
| Ticker: FYEP |
| ISIN: IE000I6Q83Z7 |
This fund offers targeted exposure to the European high-yield corporate bond market, integrating stringent sustainability criteria consistent with the Paris Agreement's climate goals. It invests in a portfolio of sub-investment-grade, fixed-rate corporate bonds denominated in euros, while actively seeking to reduce the portfolio's carbon emissions intensity. The strategy systematically excludes companies involved in controversial activities or those causing significant harm to environmental objectives, making it suitable for investors looking to combine the income potential of high-yield debt with a strong climate-conscious mandate. Furthermore, the share class employs a currency-hedging strategy to minimize the impact of foreign exchange fluctuations against its base currency.
The investment methodology is rules-based, tracking an index that adheres to the EU's Paris-Aligned Benchmark (PAB) requirements and simultaneously applies a multi-factor model. This quantitative approach aims to enhance performance by screening for securities with attractive characteristics such as value, quality, and momentum within the eligible bond universe. The PAB framework ensures the portfolio maintains a clear decarbonization trajectory, targeting a substantial reduction in greenhouse gas emissions relative to the broader market and excluding companies with significant involvement in fossil fuels. This creates a robust environmental, social, and governance (ESG) overlay on a traditionally higher-risk asset class.
Within a diversified portfolio, this instrument can act as a satellite holding for investors seeking to enhance yield and contribute to climate solutions. Its dual objective of generating income and promoting sustainability makes it a compelling option for those who wish to align their fixed-income allocation with forward-looking environmental goals. The blend of ESG screening, a defined decarbonization pathway, and a factor-based selection process presents a sophisticated method for accessing the European high-yield corporate debt market.
