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Investment Products and Services Launches

By Javier Simon editors@plansponsor.com | May 18, 2017
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Fidelity Launches ESG Index Funds
 
Fidelity Investments has launched two new index funds focused on sustainable companies. The Fidelity U.S. Sustainability Index Fund and Fidelity International Sustainability Index Fund will allow investors to contribute to companies with a positive impact on environmental, social and governance (ESG) ideals.
 
The funds offer multiple share classes and are available directly to individual investors as well as through third-party financial advisers and workplace retirement plans. These products extend Fidelity’s ESG offerings, which currently include an actively managed mutual fund—Fidelity Select Environment & Alternative Energy Portfolio—and Fidelity’s FundsNetwork program, which provides investors access to more than 100 ESG funds.

“Launching the ESG funds reaffirms Fidelity’s commitment to providing our 26 million customers access to a diverse set of investment vehicles to meet their distinct financial goals,” says Colby Penzone, senior vice president for Fidelity’s Investment Product Group. “We understand that some investors may choose to advance specific causes, based upon their own principles. As a result, we expect the ESG factors used in the new funds to help many investors better align their personal principles with their investment objectives.”

Each fund will attempt to replicate the performance of its respective index, before expenses, by normally investing at least 80% of its assets in securities included in the index, the firm says. The Fidelity U.S. Sustainability Index Fund will seek to provide investment results that correspond to the total return of the MSCI USA ESG Index, a capitalization-weighted index that provides exposure to companies with high ESG performance relative to their sector peers, as rated by MSCI ESG Research. MSCI USA ESG consists of large- and mid-cap companies in the U.S. market.

The Fidelity International Sustainability Index Fund will seek to provide investment results that correspond to the total return of the MSCI All Country World Index (ACWI) ex USA ESG Index, a capitalization-weighted index that provides exposure to companies with high ESG performance relative to their sector peers, as rated by MSCI ESG research. MSCI ACWI ex USA ESG consists of large- and mid-cap companies across 22 developed markets and 23 emerging markets.

The funds will be available in three distinct share classes: Investor Class, Premium Class and Institutional Class.

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