Fidelity International has introduced two new funds: the Fidelity Global Equity Enhanced Yield UCITS ETF and the Fidelity US Equity Enhanced Yield UCITS ETF. These ETFs are part of the firm's new Equity Enhanced Yield ETF range, aimed at providing investors with a unique source of income while still maintaining equity market exposure.
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According to Fidelity, the ETFs blend an actively managed equity portfolio with a systematic options strategy, leveraging the firm's fundamental research alongside a rules-based approach to enhance income generation. The investment process also incorporates Environmental, Social, and Governance (ESG) factors to assess risks and opportunities.
With $5 million in seed capital from Susquehanna, an authorized market participant, each ETF is set up to navigate current market volatility. Neil Davies, Head of ETFs at Fidelity International, stated that the firm has noted an increasing demand for strategies offering alternative income sources while keeping investments in equity markets.
Davies emphasized that these new ETFs allow investors to access Fidelity's extensive bottom-up equity research in a systematic way, enhancing income while also providing a buffer against market downturns through disciplined option strategies.
Vincent Li, Head of Derivatives at Fidelity International, noted the role of options in improving the return profile of equity investments. He highlighted that the firm's systematic approach focuses on selecting and executing index call options to consistently generate additional income while retaining significant equity market participation.
With this launch, Fidelity International expands its active ETF lineup to 28 funds, reinforcing its status as one of Europe’s largest active ETF providers, managing $16.8 billion in active ETF assets.