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Evaluation of environmental, social, and governance (ESG) factors that impact a company's sustainability and long-term value.
Learn More About Fidelity and ESG Investing
Many Investing Approaches Under One Umbrella
Fidelity views sustainable investing as an umbrella term covering several approaches, which include:
- Negative/Exclusionary Screening, screening out companies based on a set of values
- ESG Integration, analyzing corporate policies, statements, and reports with an eye toward mitigating risks and/or uncovering investment opportunities
- Thematic/Impact Investing, investing in companies with the intent of generating social and environmental impact alongside financial gain
Sustainable investing was once associated with excluding or screening investments based on certain criteria. Today, sustainable investing is about more than just excluding options based on your values. Cast a wider net for companies that manage risk and create business opportunities through this lens and you may find opportunities that could help you meet your long-term financial goals.
Fidelity’s Sustainable Investing Funds
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- * Active Equity ETFs. These ETFs are different from traditional ETFs. Traditional ETFs tell the public what assets they hold each day. These ETFs will not. This may create additional risks for your investment. For example: You may have to pay more money to trade the ETF's shares. These ETFs will provide less information to traders, who tend to charge more for trades when they have less information. The price you pay to buy ETF shares on an exchange may not match the value of the ETF's portfolio. The same is true when you sell shares. These price differences may be greater for these ETFs compared to other ETFs because they provide less information to traders. These additional risks may be even greater in bad or uncertain market conditions. The ETFs will publish on its website each day a "Tracking Basket" designed to help trading in shares of the ETFs. While the Tracking Basket includes some of the ETF's holdings, it is not the ETF's actual portfolio. The differences between these ETFs and other ETFs may also have advantages. By keeping certain information about the ETFs secret, these ETFs may face less risk that other traders can predict or copy its investment strategy. This may improve the ETF's performance. If other traders are able to copy or predict the ETF's investment strategy, however, this may hurt the ETF's performance. For additional information regarding the unique attributes and risks of these ETFs, see below.
- Additional information for Active Equity ETFs: The objective of the actively managed ETF Tracking Basket is to construct a portfolio of stocks and representative index ETFs that tracks the daily performance of an actively managed ETF without exposing current holdings, trading activities, or internal equity research. The Tracking Basket is designed to conceal any nonpublic information about the underlying portfolio and only uses the Fund's latest publicly disclosed holdings, representative ETFs, and the publicly known daily performance in its construction. You can gain access to the Tracking Basket and the Tracking Basket Weight overlap on Fidelity.com or i.Fidelity.com.
- Although the Tracking Basket is intended to provide investors with enough information to allow for an effective arbitrage mechanism that will keep the market price of the Fund at or close to the underlying NAV per share of the Fund, there is a risk (which may increase during periods of market disruption or volatility) that market prices will vary significantly from the underlying NAV of the Fund; ETFs trading on the basis of a published Tracking Basket may trade at a wider bid/ask spread than ETFs that publish their portfolios on a daily basis, especially during periods of market disruption or volatility, and, therefore, may cost investors more to trade, and although the Fund seeks to benefit from keeping its portfolio information secret, market participants may attempt to use the Tracking Basket to identify a Fund's trading strategy, which, if successful, could result in such market participants engaging in certain predatory trading practices that may have the potential to harm the Fund and its shareholders.
- Because shares are traded in the secondary market, a broker may charge a commission to execute a transaction in shares, and an investor may incur the cost of the spread between the price at which a dealer will buy shares and the price at which a dealer will sell shares.
- ** Prior to 5/1/21, Fidelity Environment and Alternative Energy Fund was named Fidelity Select Environment and Alternative Energy Portfolio.
- Investing involves risk, including risk of loss. You may gain or lose money over time. See individual fund pages for fund-specific risks.
- The information provided is general and educational in nature. It is not intended to be, and should not be considered, legal advice or legal opinion.