Notification of changes to the underlying funds of various Fidelity funds
03 Jul 2024
Notification of changes to the underlying funds of:
• R163 Fidelity America (“Affected ILP sub-fund 1”)
• R203 Fidelity Euro Bond (“Affected ILP sub-fund 2”)
• R232 Fidelity US Dollar Bond (“Affected ILP sub-fund 3”)
• R200 Fidelity Funds US Dollar Cash (USD) (“Affected ILP sub-fund 4”)
• R149 Fidelity Sustainable Europe Equity (“Affected ILP sub-fund 5”)
(together the “Affected ILP sub-funds”)
We have been notified by Fidelity Funds (the “Company”) of the following upcoming changes to the underlying funds of the investment-linked policy sub-funds (“ILP sub-funds”) named above. These changes will take effect from 30 July 2024 (the “Effective Date”).
Any terms not defined herein shall have the same meaning as in the relevant prospectus of the underlying funds of the Affected ILP sub-funds.
Background
As part of its ongoing commitment to responsible and sustainable investing, the Company is updating its approach to Sustainable Investing and environmental, social and governance (“ESG”) integration to reflect the evolving sustainable investing landscape and enhance transparency to investors. Details of the ESG criteria used by the Company can be found on its website: https://fidelityinternational.com/sustainable-investing-framework/.
Please note that this is an external publicly accessible website which has no affiliation with FPIL and we cannot corroborate or verify the information contained within.
Changes relating to Affected ILP sub-funds 1-4
From the Effective Date, the Company will be introducing ESG portfolio scores to promote environmental and social characteristics of the underlying funds of Affected ILP sub-funds 1-4.
The current investment process of the underlying funds of Affected ILP sub-funds 1-3 provides that they invest at least 50% of their assets in securities of issuers or companies with favourable ESG characteristics.
The current investment process of the underlying fund of Affected ILP sub-fund 4 provides that it invests at least 70% of its assets in securities of issuers with favourable ESG characteristics and up to 30% in securities of issuers with [low but] improving ESG characteristics.
From the Effective Date, these limits will no longer be included as part of the investment process of the underlying funds of Affected ILP sub-funds 1 – 4; instead the underlying funds of Affected ILP sub-funds 1 – 4 will aim to have an ESG score greater than that of the investment universe or benchmark of the respective underlying fund.
Changes relating to Affected ILP sub-fund 5
The current investment process of the underlying fund of Affected ILP sub-fund 5 provides that it invests at least 70% of the underlying assets in securities of issuers with favourable ESG characteristics.
From the Effective Date, the underlying fund of Affected ILP sub-fund 5 will invest a minimum of 80% in securities with high ESG ratings and up to 20% in issuers with lower ESG ratings including those with low but improving ESG characteristics.
High ESG ratings are defined by the Company as issuers rated by Fidelity ESG ratings as a B or above, or in the absence of a rating from the Company, an MSCI ESG rating of A or above.
These changes will take effect automatically and policyholders do not need to take any action. We recommend that policyholders seek the advice of their usual financial adviser before making any investment decisions.
We have contacted impacted policyholders and their financial advisers to notify them of the changes; primarily by e-shot, with letters sent by post where we do not hold a valid email, and to those who prefer to receive letters by post. A sample can be found opposite for reference.
Should you have any questions regarding these changes, please contact the Investment Marketing Team.
