Presenting the Fidelity Sustainable Global Equity Fund
FOR PROFESSIONAL INVESTORS ONLY
Portfolio manager Jamie Harvey introduces the fund from five angles and explains how it aims to deliver on its long-term growth and sustainability objectives.
IMPORTANT INFORMATION
The Fidelity Sustainable Global Equity Fund offers focused exposure to global ESG leaders through a quality growth portfolio of 40-60 companies offering a balanced combination of quality, growth, best-in-class ESG profiles and a significantly lower carbon footprint than the benchmark.
* Excluding formal firm-wide and fund-level exclusions ** Source: MSCI, as at 30 Dec 2022
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The fund can invest in any listed company quoted anywhere in the world*. Its investment universe includes both developed and emerging markets and the starting investable universe of the strategy consists of c.3000 global companies in the MSCI AC World index with an average market capitalisation of over US$1billion**.
Harvey says: “We strongly believe that companies addressing the world’s greatest environmental and social challenges stand to earn higher and more durable returns over time. These companies will enjoy better growth opportunities and lower long-term risk profiles, while also being a driving force for positive societal change.”
To ensure a balanced mix of quality and growth, the fund adopts a three-step investment process which focuses on sustainability, fundamentals and valuations.
Working closely with Fidelity’s global research team to uncover stocks with equally strong ESG and financial credentials, but which trade at more defensible valuations, the end result is a portfolio with an active share greater than 80%.
“Alongside the potential to have meaningful positive impact, we look for stocks that have the potential to significantly exceed the market’s expectations for earnings and cash flow over the coming three-to-five years, as well as having valuations that are firmly underpinned by medium term cash-flows and high visibility over future growth prospects,” says Harvey.
The fund invests in companies with a minimum ESG rating of MSCI BBB, or Fidelity C rated with improving trajectory.
>50% of the fund is exposed to ESG leaders – AAA & AA MSCI ESG rated companies.
Jamie Harvey and co-portfolio manager, Jeremy Podger, utilise Fidelity’s fundamental research and global research network to identify material ESG risks and opportunities at both individual company and sector levels. These teams comprise more than 120 equity research analysts* and over 20 ESG specialists.**
The fund also has access to Fidelity’s proprietary ESG ratings, which pulls together different data for industries and companies to allow the managers to build their own unique view of a company’s ESG trajectory.
“This gives us an alpha advantage over using third-party ratings that are both widely available and also tend to be more backward looking and narrower in scope,” says Harvey.
Deep and comprehensive engagement is also undertaken with all the fund’s holdings to positively influence sustainability practices and enhance investment outcomes. In 2021, Fidelity conducted 1,464 engagements with 1,113 companies.*
*Source: Fidelity International as of 30 Sept 2022. **Source: Fidelity International as at January 2023. ^The OCF is as at 31December 2022. This figure may vary from year to year.
Lead portfolio manager Jamie Harvey brings over 10 years of investment experience, joining Fidelity in 2013 as a European equity analyst. He works alongside co-portfolio manager Jeremy Podger who brings 35 years of experience managing money through multiple cycles.
In February 2018, Jamie joined the Global Equity team, working alongside Jeremy Podger in identifying corporate change investment opportunities for the Fidelity Global Special Situations Fund.
Co-Portfolio Manager Jeremy Podger joined Fidelity in February 2012 to manage the Fidelity Global Special Situations Fund and subsequently took over the management of the Fidelity World Fund (SICAV) in June 2014.
Jeremy has been managing global funds since 1990. He has deep experience in the asset class and is an FE Trustnet Alpha Manager.
*Source: Fidelity International, 30 September 2022. **Source: Fidelity International, as at January 2023.
In managing the Fidelity Sustainable Global Equity Fund, Harvey and Podger have access to more than 120 equity research analysts* and over 20 ESG specialists.**
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Harvey says there are three things he looks at when analysing a company’s sustainability profile, which he calls the “three P’s”: principle, process, and product.
Principle looks at corporate behaviour and values; process is about how a company conducts its day-to-day business in terms of things such as energy and water usage; product relates to the company’s products and services and how they directly contribute to positive impact.
“We are looking to find companies with exceptional ESG credentials, low carbon footprints and those that make a meaningful contribution to UN sustainable development goals,” says Harvey.
The portfolio also targets a carbon footprint of at least 50% less than the MSCI AC World Index, with holdings assessed against investable UN Sustainable Development Goals (SDGs).
Harvey has split the 17 UN SDGs into three overarching themes: public health, equal opportunity, and climate and planet.
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This information is for investment professionals only and should not be relied upon by private investors. The value of investments (and the income from them) can go down as well as up and you may not get back the amount invested. Investors should note that the views expressed may no longer be current and may have already been acted upon. Reference to specific securities should not be interpreted as a recommendation to buy or sell these securities, but is included for the purposes of illustration only. Changes in currency exchange rates may affect the value of an investment in overseas markets. Investments in emerging markets can be more volatile than other more developed markets. The Fidelity Sustainable Global Equity Fund can use financial derivative instruments for investment purposes, which may expose it to a higher degree of risk and can cause investments to experience larger than average price fluctuations. A focus on securities of companies which maintain strong environmental, social and governance (“ESG”) credentials may result in a return that at times compares unfavourably to similar products without such focus. No representation nor warranty is made with respect to the fairness, accuracy or completeness of such credentials. The status of a security’s ESG credentials can change over time. Investments should be made on the basis of the current prospectus, which is available along with the Key Investor Information Document, current annual and semi-annual reports free of charge on request by calling 0800 368 1732. Issued by Financial Administration Services Limited, authorised and regulated by the Financial Conduct Authority. Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited. UKM0123/370462/SSO/NA
