The latest news in investment offerings, financial products and other services relative to wealth advisors and their clients.

Fidelity International
The European active exchange-traded fund (ETF) market continues to show strong growth, with assets under management up 50 per cent year-to-date; it accounts for almost $50 billion in the region. In response to rising demand, Fidelity International said it is expanding its sustainable active ETF range with the launch of two fixed income ETFs.

Both funds are classified as Article 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR).

The Fidelity UCITS II ICAV – Fidelity Sustainable EUR High Yield Bond Paris-Aligned Multifactor UCITS ETF and Fidelity UCITS II ICAV – Fidelity Sustainable USD High Yield Paris-Aligned Multifactor UCITS ETF list on Xetra this week, with listings on the London Stock Exchange, SIX and Borsa Italiana to follow. The funds complement the $800 million Fidelity UCITS II ICAV – Fidelity Sustainable Global High Yield Bond Paris-Aligned Multifactor UCITS ETF launched in November 2022, the firm added.

The funds invest in a portfolio primarily made up of high-yielding, sub-investment grade corporate debt securities of global issuers seeking income and capital growth. It also aims to align with the Paris Agreement long-term global warming objectives by restricting carbon emission exposure in their respective portfolios.

Lotfi Ladjemi, the senior ETF sales specialist for the UK and Ireland for Franklin Templeton has also seen a lot of growth in the ETF industry recently, and the firm has been expanding its ETF range in Europe. See more commentary here.

M&G
M&G has just launched its first sustainable corporate bond strategy in collaboration with responsAbility, the Swiss-based asset manager with a 20-year track record in impact investing, acquired by M&G in 2022. The M&G (Lux) responsAbility Sustainable Solutions Bond Fund is classified as Article 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR).

The team will follow a credit strategy, constructing a highly diversified portfolio of actively selected global investment grade bonds driving positive change in six distinctive areas: better health, better work and education, social inclusion, circular economy, environmental solutions and climate action, the firm said in a statement. Investments will be mapped to the UN Sustainable Development Goals (SDGs) according to their contributions. Bonds in the portfolio will either be:

Project financing bonds – ESG bonds funding a specific project targeting either environmental (green bonds) or social outcomes (social bonds), or a combination of both (sustainability bonds).

Solution provider businesses â€“ Bonds issued by companies that actively address problems linked to environmental or social challenges through the core products and services they offer.  

The fund will be co-managed by Mario Eisenegger and Ben Lord at M&G. responsAbility will act as investment advisor, providing quality assurance and additional insights across sustainability themes and supporting the thorough analysis of M&G’s "industry-leading" research teams. responsAbility will also be a voting member of M&G’s independent Impact, SDG and solutions committee.

Ten years after the first corporate green bond was issued in 2013, M&G highlighted how the ESG bond market today presents investors with a growing universe of green, social and sustainability bonds. In the first nine months of 2024, global ESG corporate bond issuance reached $306 billion, accounting for 23 per cent of the current total corporate supply in the European investment grade space. The strategy has been available to clients since 18 October 2024.

David Zahn, head of European fixed income at Franklin Templeton, also believes that now is a good time to invest in green bonds, saying that sustainable investing will be a dominant investment trend. See more commentary here.

J Safra Sarasin Group
J Safra Sarasin Group has launched the JSS Sustainable Equity – Strategic Materials, adding to its thematic equities franchise.

The fund taps into the need for materials to help the world economy navigate the transition away from fossil fuels, for example, as well as handle rising urbanisation, the firm said in a statement. 

Daniel Lurch, portfolio manager in the thematic equities team, will lead the direction of the fund. 

The portfolio will target both upstream producers and recyclers of essential metals and minerals, as well as downstream users of these materials.