Fidelity launches ‘climate aware’ government bond ETF

Fund tracks the Solactive Paris Aware Global Government USD Index

Fidelity International has launched the Fidelity Global Government Bond Climate Aware Ucits ETF.

The fund is a passively managed ETF that tracks the Solactive Paris Aware Global Government USD Index. The index is designed to reflect the performance of global local currency government bonds issued by investment grade countries.

It also aims to exhibit a level of carbon emission intensity 14% lower than the investible universe at launch, and will aim for a further year-on-year decarbonisation target, currently at an average rate of 7% per year.

Fidelity said the ETF is designed to deliver a significant reduction in the carbon footprint of the portfolio compared with similar products tracking “non-Paris-aware” indices.

It is categorised as Article 8 of the Sustainable Finance Disclosure Regulation and a minimum of 50% of its assets will be invested in securities of issuers with favourable ESG characteristics.

The fund commenced trading on Monday 20 March on the London Stock Exchange, Deutsche Börse Xetra, SIX Swiss Exchange and Borsa Italiana.

It is the third in a series of climate focused ETF launches by Fidelity, joining the Fidelity Sustainable Global Corporate Bond Paris-Aligned Multifactor UCITS ETF and the Fidelity Sustainable Global High Yield Bond Paris-Aligned Multifactor UCITS ETF.

Nick King (pictured), head of ETFs at Fidelity International, commented: “Sustainable investing is a key priority for many of our clients and often they are focused on managing climate change through their investment allocations.

“This new ETF provides investors with a highly diversified global government bond exposure aligned to climate objectives. This expands our existing range of climate focused fixed income ETFs, providing innovative, cost-effective building blocks for asset allocation.”

This article first appeared on ESG Clarity’s sister title Portfolio Adviser.