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ESG, innovation and education: Fidelity’s three-pronged focus

By putting sustainability at the heart of its investment approach and showing its commitment to creating value for investors through digital access, Fidelity International has been named as AsianInvestor’s ‘Fund House of the Year - Singapore’ for 2022.
ESG, innovation and education: Fidelity’s three-pronged focus

Today’s fast-changing and unpredictable investment climate demands an approach that looks beyond short term allocations in favour of building resilient, future-focused portfolios.

While the dynamic and disruptive nature of the macro and market environments cannot be ignored, forward-thinking institutions are using the current uncertainty to bolster their capabilities and implement new or more flexible approaches to how they service clients.

For asset managers, this ranges from new product offerings with a greater sustainability focus, to more engagement of digital tools, to increasingly targeted investor education.

“We continued to grow our client base and retained existing clients [in Singapore in 2021], adding new funds to their product shelf and increasing AUM to existing products,” said Sabrina Gan, head of private banking for Asia ex-Japan, and wholesale distribution for South-east Asia, at Fidelity.

With accelerated demand for digital investing, the firm has also forged digital partnerships with new financial advisers by expanding its products and services to a new segment of fintech clients.

“Our expansion plans include growing new business pillars in digital assets and private assets that will enable our clients to access more innovative offerings and complement their portfolios, giving them a new level of diversification and convenience,” added Gan.

A sustainable route to success

Being more sophisticated and relevant in engaging with the local market has become a more important differentiating factor as the pandemic and its knock-on effects have continued to impact the investment landscape.

Fidelity expanded its product offerings, by launching new funds and repurposing existing ones in 2021 with close to 90 funds currently registered in Singapore.

Among these was the firm’s Fidelity Enhanced Reserve Fund, a fixed income offering developed to deliver a high-quality, short-dated, liquid investment solution. Since its launch in March 2018, the AUM had increased to over US$2 billion by the end of March 2022. Meanwhile, the Fidelity Funds - China Innovation Fund, which rides the thematic wave of growing innovation in China, creates a new way for investors to take exposure to these sectors.

Yet perhaps the most notable additions for Fidelity have come via the sustainability theme.

Fidelity has 13 ‘Sustainable Family of Funds' registered in Singapore (as of the end of the first quarter 2022) that specifically focus on various sustainability themes. A case in point is the Fidelity Funds - Sustainable Asia Equity Fund, a highly-rated flagship strategy that uncovers sustainably-driven leaders across Asia, with 70% of the fund's assets meeting strict ESG standards.

In addition, there are more than 55 Fidelity funds currently registered in Singapore that are classified Article 8 under the European Sustainable Finance Disclosure Regulation (SFDR) – with a minimum of 50% in assets invested in sustainable securities.

“Fidelity’s edge as a leading ESG manager, coupled with the increased demand for sustainable funds by clients, has spurred us to strengthen our ESG product offerings, launching new funds and further integrating ESG considerations into all our funds,” explained Gan. “We want to create a more sustainable future where ESG ranks high among investors who until recently have believed that sustainability is diverged from performance.”

Creating positive change

Such an outcome can also be traced to efforts to further integrate sustainable investing within the firm’s investment process and expand its ESG coverage, footprint and engagements.

In 2021, for example, Fidelity updated several existing policies – its Sustainable Investing Policy, its Stewardship & Shareholder Engagement Policy and its Voting Policy – as well as formally adopted a Climate Investing Policy and launched its inaugural Corporate Sustainability Report.

Further, beyond its role as stewards of client assets, the firm also embeds ESG into its corporate culture, applying the same standards on itself.

A recent example of this was its decision to bring forward its goal to reach net zero by 2030, a decade earlier than the previous target of 2040, and to ensure its investment portfolios achieve net zero by 2050.

With its eye on Asia, Fidelity believes the region offers rich and meaningful opportunities to engage with companies to shape positive outcomes. Jenn-Hui Tan, Fidelity’s global head of stewardship and sustainable investing, is based in Singapore and the firm has significant resources strategically placed across five markets in Asia to generate ESG insights and highlight opportunities.

Having engaged globally with over 1,100 companies and conducted over 1,400 engagements with companies in 2021, Fidelity collaborates with regulators, partners, peers and other key shareholders – plus it works closely with external ESG-related bodies that seek to improve the way industries are regulated and how companies are managed. From a regional perspective, Asia accounts for almost a third of Fidelity’s engagements globally.  

Fidelity’s philosophy and commitment to sustainable investing has earned the company recognition from the industry and multiple awards.

Hi-tech and high touch

The pandemic over the past two years has also transformed the way industry players are communicating with clients. This has driven the more innovative use of technology where face-to-face meetings with investors were curtailed, as well as to reach end-investors directly.

“We amplified our digital marketing collaterals to boost investor education via Fidelity’s online presence across multiple platforms,” said Gan.

Among increased investor education efforts have been regular ‘live’ portfolio manager updates with Q&A via webcasts, quarterly investment outlook videos, infographics, slide animations and educational videos. Besides regularly publishing research on topical issues to keep clients abreast of the latest events, the firm also conducted thought leadership events such as educational teach-in sessions on ESG and due diligence workshops for Singapore clients to engage with its global network of experts.

Ultimately, the ongoing shift from physical to digital has paved the way for Fidelity to evolve its sales and marketing strategy to seek new channels of audience reach and create new forms of sales collateral for better engagement.

These will give clients easier access, provide for a wider audience and position the firm as a leading employer of digital tools to keep clients abreast of the latest products.

“Investors expect current content at their fingertips and Fidelity has harnessed technology to improve the client experience, augmenting our business in Singapore,” added Gan.

As an investment leader in Asia and China, Fidelity will continue to position itself at the forefront of trends that will shape the industry. The next three to five years will be an exciting time for the business and team in Singapore.

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