New Listing

Fidelity unveils five-strong thematic ETF range

ESG tilted, the ETFs are classified as Article 8 under SFDR

Theo Andrew


Fidelity International has entered the world of thematic ETFs with the launch of five products including clean energy, electric vehicles and the metaverse.

The Fidelity Clean Energy UCITS ETF (FRNG), the Fidelity Electric Vehicles and Future Transportation UCITS ETF (FDRV), the Fidelity Cloud Computing UCITS ETF (FCLD), the Fidelity Digital Health UCITS ETF (FDHC) and the Fidelity Metaverse UCITS ETF (FMTV) are listed on Deutsche Boerse, the London Stock Exchange, SIX Swiss Exchange and the Borsa Italiana with total exchange ratios (TERs) of 0.50%.

All five ETFs track in-house indices of the same name. For example, FRNG will track the Fidelity Clean Energy ESG Tilted index which offers exposure to companies which provide technology and equipment to solar, wind and hydrogen energy sources.

FDRV will invest in companies engaged in the production of electric and autonomous vehicles, breaking them into two-sub themes comprising of the technology that enables manufacturing; and future transportation enablers such as semi-conductor companies and autonomous software providers.

Meanwhile, FCLD tracks companies that aim to increase the adoption of cloud computing.

FDHC will also split the index into two themes, tracking digital healthcare companies including internet pharmacies and telehealth services; and connected medical devices covering neurology, oncology, respiratory and cardiology medical equipment.

Fidelity’s metaverse ETF, FMTV, will invest in the ‘future state of the internet’ tracking companies involved in the manufacturing of computing hardware, digital infrastructure and gaming hardware.

All indices have an ESG tilt, meaning a minimum of 50% of the ETFs index constituents will have “sustainable characteristics”. As a result, the range will be classified as Article 8 under the Sustainable Finance Disclosure Regulation (SFDR).

In addition, the indices apply an ESG controversies screen to exclude companies based on their impact on environment and society.

Fidelity already runs a range of thematic ETFs listed in the US, however, they do not have ESG tilts.

Nick King, head of ETFs at Fidelity International, said: “Thematic investing seeks to identify and capitalise on long-term, structural trends by investing across countries and sectors to capture transformative drivers of the global economy, businesses and society.

“Many of these themes have an enhanced focus on sustainability as well as seeking to address specific social and environmental challenges.”

It is the firm’s first launch since February when it entered the crypto space with the Fidelity Physical Bitcoin ETP (FBTC).

In March, Fidelity poached State Street’s European distribution head Stefan Kuhn to expand its European ETF business.

European ETF issuers continue to expand their thematic ranges, anticipating it to be one of the fastest growing areas of asset management.

In July, DWS launched four thematic ETFs, also with ESG screens, targeting fintech, healthcare, next-generation internet and innovation.

Fineco Asset Management also announced it would be launching two thematic ETFs last month, tracking cybersecurity and semi-conductors, as it looks set to become the only Italian-headquartered ETF issuer in the market.

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