Investment management firm Fidelity International announced the launch Fidelity Global Government Bond Climate Aware UCITS ETF, expanding its climate fixed income range of offerings with an exchange traded fund targeting decarbonization goals while providing exposure to the performance of global local currency bonds of investment grade countries.
The new ETF tracks the performance of the Solactive Paris Aware Global Government USD index, which includes government bonds issued by investment grade countries, while following a decarbonization trajectory, with weightings influenced by decarbonization objectives alongside other factors including bond issuance levels, yield levels, and foreign exchange rates.
According to Solactive the index aims to demonstrate a minimum 14% lower carbon intensity compared to its investable universe, in addition to an annual 7% decarbonization goal.
Timo Pfeiffer, Chief Markets Officer at Solactive, said:
“Climate change is one of the biggest challenges of our time, which translates into a surge in demand for climate investment strategies. As part of the overall path to a greener planet, Solactive is committed to increasingly develop more sustainable investment solutions and we are pleased that Fidelity is committed to the same goal and chose Solactive as the index provider for this new product.”
The new ETF follows the launch last year by Fidelity of two other climate-focused fixed income solutions in November 2022 tracking Solactive indices, including the Fidelity Sustainable Global High Yield Bond Paris-Aligned Multifactor UCITS ETF, and the Fidelity Sustainable Global Corporate Bond Paris-Aligned Multifactor UCITS ETF.
Nick King, Head of ETFs at Fidelity International, said:
“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.”