Fidelity International has unveiled a new range of higher income-focused equity ETFs.
The first ETFs to launch in the Equity Enhanced Yield range are the Fidelity Global Equity Enhanced Yield UCITS ETF and the Fidelity US Equity Enhanced Yield UCITS ETF.
The strategies combine actively managed equity portfolios with an options strategy designed with the aim of generating additional income.
Insights from Fidelity’s global fundamental research platform feed into stock selection and portfolio construction while the options overlay systematically sells index call options. ESG considerations are also factored in when assessing investment risks and opportunities.
Each ETF will be supported by $5m of seed capital from authorised market participant Susquehanna. Both were listed on Germany’s Xetra and Italy’s Borsa Italiana on 2 October and on the London Stock Exchange on 5 October.
Neil Davies, head of ETFs at Fidelity International, said: “As market volatility continues to challenge investors, we are seeing growing demand for strategies that can provide alternative sources of income while allowing investors to remain invested in equity markets.
“What differentiates this range is that it gives investors access to Fidelity’s bottom-up equity research in a systematic way. Alongside this, a disciplined, rules-based options strategy seeks to provide an additional source of income, with the option premiums also helping to cushion some of the impact of market declines.”
Vincent Li, head of derivatives at Fidelity International, added: “Options can be a powerful tool for reshaping the return profile of an equity investment. Our approach is deliberately systematic, using a disciplined framework to select and implement index call options with the aim of generating consistent additional income, while retaining meaningful participation in equity markets.”
