Environmental, social, and governance investing is “a big initiative” for Fidelity Investments, according to the firm’s head of ETF management and strategy, Greg Friedman.
“We see the trends; our clients are asking for it,” he said.
Speaking with VettaFi’s editor-in-chief Lara Crigger for ETF Leaders, powered by the New York Stock Exchange, Friedman explained that when Fidelity develops new products, they ask themselves: “what are the clients looking for, and how do we solve their investment needs?”
So, at the time of the interview, which was conducted at Exchange: An ETF Experience 2022 in April, Fidelity had three ESG funds: the Fidelity Women’s Leadership ETF (FDWM), the Fidelity Sustainability U.S. Equity ETF (FSST), and the Fidelity Sustainable High Yield ETF (NYSE Arca: FSYD). Later that month, the investment firm launched two more sustainable funds: the Fidelity Sustainable Core Plus Bond ETF (FSBD) and the Fidelity Sustainable Low Duration Bond ETF (FSLD).
“So, it’s an important, exciting area for us, and we’re committed across the board to … both mutual funds and ETFs,” Friedman said.
Thematics “More Tangible” to Investors
Historically, investors have used the nine style box way of investing. But now, Friedman is “seeing a lot of investors, especially young investors … that want thematic.”
“It’s more tangible to them. They can vote with their wallet. It’s something that they can be passionate about,” Friedman said.
And according to Friedman, the increased appetite for thematics is “exciting” for Fidelity because it allows the manager “to use the same research that has powered [its]active portfolios for 75 years, put [it]into a rules-based methodology, and create thematics that are really smart and active in thinking, passive in implementation, and allow the investors and advisors to really take this new wave of thematic investing to a new level.”
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