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Fidelity International has introduced a suite of five thematic equity ETFs in Europe targeting the emerging technology themes of clean energy, electric vehicles & future transportation, cloud computing, digital health, and the metaverse.

Fidelity has launched its first thematic equity ETFs in Europe.

The funds are linked to indices developed in-house by Fidelitys quantitative research and investment team.

Each index covers a broad global universe consisting of stocks from across the market capitalization spectrum while using a combination of company revenue data and natural language processing (NLP) to select companies best aligned with the underlying theme.

NLP is used to analyze text-based documents to identify companies with relevant keywords associated with business activities linked to a specific theme. Stocks are then assigned a thematic relevancy score and those with the highest scores are selected for inclusion in the index.

Companies must typically generate at least 50% of their total revenue from business activities relevant to the theme to be eligible for inclusion.

Each index also includes an environmental, social, and governance (ESG) screen which, according to Fidelity, results in at least 50% of each indexs underlying constituents having sustainable characteristics. As such, each ETF is classified as an Article 8 product under the European Unions Sustainable Finance Disclosure Regulation (SFDR).

Commenting on the new listings, Nick King, Head of ETFs at Fidelity International, said: Thematic investing seeks to identify and capitalize on long-term, structural trends by investing across countries and sectors to capture transformative drivers of the global economy, businesses, and society. Many of these themes have an enhanced focus on sustainability as well as seeking to address specific social and environmental challenges.

Our thematic indices have been constructed through a collaboration of our proprietary fundamental, sustainable, and quantitative research capabilities to ensure that we are providing clients with exposure to the best stocks in each particular theme.

The ETFs have been listed across Europe including on London Stock Exchange, Deutsche Brse Xetra, and SIX Swiss Exchange, with a further listing on Borsa Italiana expected in the near future.

Each fund comes with an expense ratio of 0.50%.

The ETFs

The Fidelity Clean Energy UCITS ETF (FRNG) tracks the Fidelity Clean Energy ESG Tilted Index. The index reflects the performance of companies that distribute, produce or provide technology or equipment to support the production of energy from solar, wind, hydrogen, and other renewable sources.

The Fidelity Electric Vehicles and Future Transportation UCITS ETF (FDRV) tracks the Fidelity Electric Vehicles and Future Transportation ESG Tilted Index. The index reflects the performance of companies engaged in the production of electric or autonomous vehicles and their components, as well as firms developing technologies or energy systems that aim to change the future of transportation.

The Fidelity Cloud Computing UCITS ETF (FCLD) tracks the Fidelity Cloud Computing ESG Tilted Index. The index reflects the performance of companies that provide products or services enabling the increased adoption of cloud computing, characterized by the delivery of computing services over the internet.

The Fidelity Digital Health UCITS ETF (FDHC) tracks the Fidelity Digital Health ESG Tilted Index. The index reflects the performance of companies providing healthcare records management, connected healthcare devices, surgical robotics, telemedicine, and other technology-enabled healthcare products and services.

The Fidelity Metaverse UCITS ETF (FMTV) tracks the Fidelity Metaverse ESG Tilted Index. The index reflects the performance of companies that develop, manufacture, distribute, and sell products or services related to establishing and enabling the metaverse.

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Fidelity rolls out five thematic ETFs in Europe - ETF Strategy