Fidelity Investments Canada has launched a new ETF – the Fidelity Sustainable World ETF (FCSW CN) – on NEO Exchange.
The fund is Fidelity’s first ESG-focused ETF to launch in Canada.
Within the ETF space, Fidelity is best known in Canada for its ‘Fidelity Factor’ funds, namely factor-linked ETFs providing exposure to dividends, low volatility, and quality.
The new fund, however, is a multifactor strategy and actively managed – by sub-advisor Geode Capital Management.
It is also the firm’s first ETF in Canada to offer environmental, social, and governance (ESG) considered exposure.
Andrew Clee, Vice President, ETFs at Fidelity Investments Canada, commented, “As sustainable investing continues to gain momentum, we are excited to offer our clients the opportunity to align their investments with their values. The Fidelity Sustainable World ETF is a global multifactor equity strategy that uses a best-in-class approach to invest in companies with favourable ESG characteristics.”
The ETF seeks long-term capital appreciation by investing in equity securities from both developed and emerging markets.
Companies with business operations in tobacco, weapons, thermal coal, gambling, adult entertainment, alcohol, and nuclear power will be removed from selection. Geode Capital Management also analyses firms across general ESG factors to exclude companies that do not meet basic criteria.
The fund then uses a multifactor model to guide asset allocation, favouring firms with robust value, momentum, quality, growth, and information flow characteristics. By analyzing the relationship between factor returns, the model seeks to maximize long-term appreciation while maintaining risk constraints.
The ETF comes with a management fee of 0.55%.
It is the first time Fidelity has listed an ETF on NEO Exchange, becoming the country’s fourteenth ETF issuer to launch a fund on the exchange.
“We are proud to welcome Fidelity to the NEO family and embrace a forward-thinking listing partner that values the importance of ESG investing,” said Erik Sloane, Head of Sales, NEO. “As the first Canadian exchange to partner with the Sustainable Stock Exchanges Initiative, we understand NEO plays an important role in fostering greater awareness of ESG factors across the whole investment spectrum, and how relevant they are in the global capital markets. Welcoming yet another industry leader to our exchange is a testament to the benefits of and continued need for competition in Canadian capital markets.”
Fidelity’s Clee added, “We are excited to begin our partnership with NEO as we launch our first ESG ETF. NEO supports and delivers innovation within Canada’s capital markets while offering outstanding client service – we look forward to growing our relationship with them in the years to come.”