Fidelity Investments Socially Responsible Funds


Fidelity International Sustainability Index Fund

Screening for Socially Responsible ETFs | Fidelity

Expense ratio : 0.11%

3-Year Average Return: 17.41%

As one of the best Fidelity ESG funds, the Fidelity International Sustainability Index Fund typically invests at least 80% of its assets in securities that are part of the MSCI ACWI ex USA ESG Index, as well as depository receipts reflecting such securities. The MSCI ACWI ex USA ESG Index is a capitalization-weighted index that tracks businesses that outperform their sector counterparts in terms of environmental, social, and governance performance, as determined by MSCI ESG Research.

The MSCI ACWI ex USA ESG Index includes big and mid-cap businesses from both emerging and developed economies that do not include the United States. To mimic the returns of the MSCI ACWI ex USA ESG Index, statistical sampling approaches based on capitalization, dividend yield, industry exposures, price/book ratio, price/earnings ratio, country weightings, earnings growth, and the effect of foreign taxes were used. The fund earns money by lending securities.

How Vanguard Fidelity And Others Embrace Esg Investing

Sustainable investing strategies have gone mainstream here’s how some of the best money managers are doing it.

A version of this article appeared in the May 2020 issue of Morningstar FundInvestor. Download a complimentary copy of Morningstar FundInvestor .

Vanguard has it. Pimco has it. Fidelity has it.

Environmental, social, and governance investing has hit the mainstream. Over the past decade, it has become a much more sophisticated strategy, and many of the best money managers are doing it.

This is a good time to check in on the state of ESG investing. In 2019, net flows to ESG funds in the United States topped $20 billion, compared with a little over $5 billion the prior year.

The central idea of ESG is to support sustainable investing in a way that has a positive impact on the world. It can also be viewed as a risk-management process, as companies that embrace sustainable practices are managing liabilities better than others, perhaps recognizing new opportunities, and may be better positioned to grow in the future. Environmental, social, and governance investing has evolved from funds that simply screened out undesirable companies like polluters or sellers of tobacco to strategies that apply a matrix of sophisticated screens to assess the best and worst players in every industry and actively seek to have a positive impact in many ways.

Sustainable Investing With Fidelity

Where appropriate and aligned with a funds investment objectives, we apply an ESG perspective directly to the products we offer our clients. More broadly, we have incorporated one or all of these ESG factors into our fundamental researchacross all asset classes and investment disciplines*:

  • Environmental themes, such as investing in companies that are responding to consumer demand for sustainable practices
  • Social themes, such as investing in companies committed to a diverse and inclusive workplace
  • Governance themes, such as investing in companies committed to diverse board composition, strong oversight, and shareholder friendly policies

Two-thirds of retail customers say social impact is key to their investing decisions1, according to Fidelity research.

181 CEOs from some of Americas largest companies have committed to lead their companies for the benefit of ALL stakeholders customers, employees, suppliers, communities and shareholders.2

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The Price Of Doing Good

Socially responsible mutual funds tend to have higher fees than regular funds. These higher fees can be attributed to the additional ethical research that mutual fund managers must undertake. In addition, socially responsible funds tend to be managed by smaller mutual fund companies and the assets under management are relatively small. Under these circumstances, it is difficult for SRI funds to make use of the economies of scale available to their larger rivals.

Best Fidelity Esg Funds To Invest In 2021

The Best Socially Conscious Investment Advisors

Our posts may contain links from our affiliate partners. This supports helps support the site as we donate 10% of all profits to sustainability organizations that align with our values. However, this does not influence our opinions or ratings. Please read our Terms and Conditions for more information.

Looking for the best Fidelity ESG funds? Today, the call to be more socially and environmentally aware is too hard to ignore, even for investors. A growing number of do-gooders want their money to have a good impact on the world, and this is where ESG investing comes in.

When selecting where to invest their hard-earned cash, some of todays investors put sustainable and environmental, social, and governance concerns at the forefront of their decision-making. While this is wonderful news for the planet and the communities in which we live, it also offers investors a great chance to explore new opportunities.

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Open An Investing Account

If youve decided to go it alone, youll need to open a brokerage account first, which is where you can buy and sell investments. Some brokerages have stronger socially responsible investing offerings than others. For example, Merrill Edge and Fidelity have screener tools to help you find the right funds for your portfolio.

Socially Responsible Funds On The Core Menu

There are many socially responsible investments on the core menu.

  • The Social Equity Fund is designed to invest in mid- and large-capitalization U.S. stocks that have been screened for environmental, social and governance criteria. Criteria include exposure to fossil fuels, vice products, weapons, and poor company governance , among others.
  • The UC Global Equity ex Fossil Fuel Fund is designed to invest in domestic and international companies that do not own fossil fuel reserves or sell tobacco products.
  • In addition, all core fundswith the exception of the UC Growth Company and UC Diversified International Fundfollow the Sustainable Investing Framework developed by The Office of the Chief Investment Officer of the Regents .

In fact, UCs Office of the Chief Investment Office considers sustainability factors as a fundamental component of its investment decision-making because doing so provides the most accurate, risk/return calculation over a long-term investment horizon. As a result, the OCIO excludes certain types of stocks from the core menucompanies that derive their profits from thermal coal or oil sands mining and production is one example. You can identify other types of stocks excluded from the core funds by reading the OCIOs Disclosure of UCs Sustainability Investment Screening Process statement on the fund fact sheet.

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Money Funds Get Some Relief But Pressures Linger

Fed Chair Jay Powells remark last week that the central bank was talking about talking about raising rates in 2023 was enough to send markets dipping.

One item that got buried in all the talk about base federal funds rates? The central bank has already agreed to bump up rates on its overnight repurchase facility in order to provide some relief to money market funds.

The Feds low base ratecombined with a tsunami of pandemic stimulushas driven down yields on short-term debt, with many funds already cutting fees to prevent going negative.

Despite the low rates, assets in government money market funds jumped above $4 trillion for the first time in May. Many funds havent been able to find a better place to put their assets than the Feds overnight reverse repurchase program, which has paid 0% interest. Use of the facility climbed to a record $584 billion earlier this month.

At its meeting last week, the Fed agreed to increase the interest rate on the facility to 5 basis points , helping money markets stay in the blackfor now. But with no plans to raise base rates anytime soon, and with the Treasury likely to issue more short-term debt in coming months, money markets yields may stay near-zero for some time. That could force further consolidation and fund closures. In April 2020, both Fidelity and Vanguard closed their government money market funds to new investors, though both firms have since reopened them.

Fidelity Launches Five Esg Mutual Funds And Etfs Focused On Environment Climate Change Gender Diversity & Sustainability

What is socially responsible investing?

BOSTON—-Fidelity Investments® today expands its sustainable investing lineup with five new actively managed Environmental, Social and Governance funds two equity mutual funds, one bond mutual fund and two equity exchange-traded funds available June 17, 2021. With the addition of these new funds, Fidelity will offer investors and advisors 11 ESG mutual funds and ETFs. More information about Fidelitys full suite of sustainable investing funds and resources can be found at

Fidelitys new equity funds will seek to invest in high-quality companies that are addressing climate change via corporate strategy or through products and services, prioritizing and advancing womens leadership and development, or that have proven or improving sustainability practices. Additionally, Fidelity will offer a bond fund seeking to invest in companies that provide environmental solutions or support efforts to reduce their own environmental footprints. The mutual funds and ETFs will be available for individual investors and financial advisors to purchase commission-free through Fidelitys online brokerage platforms. As stewards of our customers investments, Fidelity believes that integrating a robust ESG investing component into our research and/or portfolio management processes enhances our ability to identify long-term investment opportunities.

About Sustainable Investing at Fidelity

About Fidelitys Growing Active Equity ETF Lineup


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Does Fidelity Have Green Or Esg Funds

Fidelity offers 11 ESG and sustainable funds. These include nine mutual funds and two exchange-traded funds . Both ETFs and mutual funds are collections of stocks or bonds, but ETFs are generally cheaper, more tax-efficient, and easier to trade.

Fidelitys sustainable lineup is rapidly expanding: five out of 11 ESG funds launched in June 2021.

Fidelity funds have no minimum investments, and you can buy them through most brokers.

As A Member Of The Private Donor Group You Have Several Options For Impact Investments For Your Giving Account You May Recommend:

  • A grant to an impact investing nonprofit
  • A recoverable grant to a nonprofit
  • Investments in socially responsible mutual funds or ETFs*
  • Investments in socially responsible fixed-income products, such as community and green bonds*
  • Investments in impact-oriented private equity or venture capital funds*

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Fidelity Water Sustainability Fund

Expense Ratio : 1.44%

Average 1-Year Return: 33.90%

The Fidelity Water Sustainability Fund intends to invest in stocks of water sustainability companies that are creating efficiency, extending the life cycle, and/or discovering cost-effective new technologies to supply safe, dependable, and conveniently available water.

As one of the finest Fidelity ESG funds, it invests in the growth and value stocks of firms with a diverse market capitalization. It builds its portfolio using fundamental research and a bottom-up stock selection strategy. The investment aims for long-term capital growth. Normally, the fund invests at least 80% of its assets in water sustainability company stocks.

Normally, the Fidelity Water Sustainability Fund invests largely in equity securities. Water conservation services, water treatment, water resources, desalinization or purification facilities, water distribution and utilities, water technologies and analytics, environmental water services and water infrastructure , irrigation, and water supply or processing services are examples of such businesses.

What Is Socially Responsible Investing And How To Get Started

Socially Responsible Investing

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The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks or securities.

Picking up litter, volunteering at a hospital, donating to racial justice organizations, investing which of these is not like the others? When it comes to making the world a better place, investing isnt the first thing that comes to mind. But socially responsible investing, or SRI, is more attainable and profitable than ever.

Once considered a fairly radical strategy, SRI has increasingly gained in popularity. According to a 2019 Morgan Stanley survey, 85% of individual investors are interested in sustainable investing, up from 75% in 2017. The options available to those investors have also grown: Investment research company Morningstar says there were 303 sustainable open-ended mutual funds and exchange-traded funds in 2019, up from 111 in 2014.

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Fidelity Womens Leadership Fund

Expense Ratio : 1.1%

Average 1-Year Return: 30.35%

In Fidelitys Women and Investing Study, they found that more than half of investors are interested in a fund that invests in firms that promote women in leadership roles, with millennial women showing the most enthusiasm .

Nicole Connolly, a 21-year industry expert, oversees the Fidelity Womens Leadership Fund. The goal of the fund is to find high-performing companies that value and promote womens leadership and growth.

As one of the best Fidelity ESG funds, it invests at least 80% of its assets in equity securities of firms that emphasize and enhance womens leadership and development, making it one of the top Fidelity ESG funds. Companies that meet the following criteria at the time of purchase fall into these categories:

A woman must be a member of the senior management team

The firm must be managed by a board of directors with at least one-third female directors or

The company must have implemented policies geared to recruit, retain, and develop women, in the judgment of the Adviser. The fund invests in domestic and international issuers securities.

According to Fidelitys study, firms with women in senior roles and programs that promote gender diversity outperform the market over time.

Purchase Exemption And Minimum Investment Requirements

The Fidelity Absolute Return Fund is available to investors who can meet certain eligibility requirements under the accredited investor prospectus exemption under applicable Canadian securities legislation. This Exemption is available only to “accredited investors” as defined in National Instrument 45-106, Prospectus Exemptions. The minimum purchase amount is CDN$25,000 .

If you are a financial advisor who, under applicable Canadian securities legislation, is registered as a dealing representative of a sponsoring IIROC member investment dealer or MFDA member mutual fund dealer, and you are acting on behalf of a client who qualifies under the Exemption and who can meet the Minimum Purchase Amount, please accept the disclaimer below to learn more about the Fund.

If you are a financial advisor who, under applicable Canadian securities legislation, is registered as a dealing representative, and approved as a portfolio manager, of a sponsoring IIROC member investment dealer, and are acting on behalf of a fully managed account client who qualifies under the Exemption and who can meet the Minimum Purchase Amount, please accept the disclaimer below to learn more about the Fund.

You and your sponsoring IIROC member investment dealer or MFDA member mutual fund dealer, as the case may be, are responsible for ensuring that your client who is purchasing units in the Fund meets the definition of “accredited investor” and is eligible for the Exemption.

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How To Responsibly Balance Your 401

If you make contributions to an employer-sponsored 401 plan, your contributions are generally invested in mutual funds, index funds or target-date funds. These funds may buy securities issued by hundreds or even thousands of different companies.

The funds available to you in your 401 are limited by the plans administrator. Only 2.9% of all 401 plans have ESG funds, according to the Plan Sponsor Council of Americas most recent study. That means your money could very well be parked in companies that dont align with your values.

If you find that your 401 does not offer any ESG-rated funds, you can opt to customize your investments through a brokerage window, also known as self-directed brokerage option. This DIY-approach allows participants more investment options than the mutual funds offered by the retirement plan directly. After opening a brokerage window, investors can focus their money in companies that support their values.

If you choose to opt for a self-directed brokerage option with your 401 plan, be aware that it comes with challenges. A plan sponsor can limit choices offered through brokerage windows, and these windows can come with maintenance fees and higher than average trading costs.

Investors interested in exploring a brokerage window option should work with a financial advisor to determine a strategy that will be both cost effective and efficient for their investing goals.

Why Consider A Socially Responsible Investing Approach

Socially Responsible Investing

Considering socially responsible factors doesnt just help you match your investments to your principles. It can make sound business sense, too. Companies that focus on such factors can signal:

  • Operational efficiency and lower costs reduced environmental liability
  • Opportunities for low-carbon revenue sources
  • Effective management of human capital
  • Reduced risks related to product/service safety opportunities for an expanded customer base
  • Financial and operational decisions that best serve shareholders
  • Reduced risk from reputational damage or weak financial controls and
  • Well-managed operations and costs in the face of regulatory changes.*

Fidelity Sustainability Us Equity Fund

Expense ratio : 1.88%

Average Life Total Returns: +2.10%

The Fidelity Sustainability U.S. Equity Fund, one of the best performing Fidelity ESG funds, focuses its investments in equity securities, with at least 80% of assets typically allocated to equity securities of U.S. companies that the Fidelity ESG team, Fidelity Management & Research Company LLC , believes employ sustainability practices, based on an assessment of each companys individual ESG.

FMRs proprietary ESG ratings process is used to assess the condition of a companys sustainability practices. This is measured through a data-driven framework that consists of both proprietary and third-party data. The process also provides a qualitative forward-looking assessment of a companys sustainability outlook from FMRs fundamental research analysts and ESG team.

FMRs ESG ratings are based on a variety of factors, including a companys environmental profile, which may include waste management, carbon and toxic emissions, vulnerability to the physical impacts of climate change, water management, and research and investment in services, energies, and products, that reduce emissions and/or provide opportunities for a low-carbon transition.

A social profile evaluation considers a companys attitude to human capital management, product safety, data privacy, diversity and inclusion, and human rights, among other things.


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