Fidelity Investments has introduced a new actively managed fixed income ETF in the US providing socially responsible exposure to high yield corporate bonds.
Pam Holding, Head of Sustainable Investing at Fidelity Investments.
The Fidelity Sustainable High Yield ETF (FSYD US) has been listed on NYSE Arca with an expense ratio of 0.55%.
The fund invests in US dollar-denominated sub-investment-grade debt issued by corporate issuers with proven or improving sustainability practices, according to Fidelity’s proprietary forward-looking and historical ESG ratings framework.
Benchmarked against the ICE BofA US High Yield Constrained Index, the ETF harnesses Fidelity’s expertise in credit analysis to select bonds with strong return potential and a low probability of default.
Pam Holding, Head of Sustainable Investing at Fidelity Investments, said: “Fidelity’s ESG ratings build on our legacy of active management and quantitative capabilities, leveraging our global experience in corporate engagement and fundamental analysis. The integration of our proprietary ESG ratings into this product will offer our customers a building block solution to help connect their financial goals to positive themes in the broader world.”
The fund is available for individual investors and financial advisors to purchase commission-free through Fidelity’s online brokerage platforms.
Investors seeking sustainable high yield bond exposure may also wish to consider index-linked ETFs from DWS, Nuveen, and BlackRock. They are the $20m Xtrackers JP Morgan ESG USD High Yield Corporate Bond ETF (ESHY US), which comes with an expense ratio of just 0.20%; the $80m Nuveen ESG High Yield Corporate Bond ETF (NUHY US), which has an expense ratio of 0.30%; and the $160m iShares ESG Advanced High Yield Corporate Bond ETF (HYXF US), which costs 0.35%.