Fidelity incorporates real estate fund into newly rebranded sustainability strategy

Fidelity International will merge a dedicated real estate fund into a broader sustainable equity strategy later this year, Citywire Selector has learned.

According to a letter to shareholders, the merger, which will take effect on December 12, 2022, will see it combine the €192 million Fidelity Global Property and €151 million Fidelity Sustainable Global Dividend Plus funds.

In the letter, Fidelity said the merger is part of a program that aims to increase the number of income solutions, sustainability products and investment themes available to shareholders, while focusing the broader range on clear objectives in key market segments.

The Sustainable Global Dividend Plus fund is one of six strategies that were rebranded as sustainable funds earlier this year.

This is a reasoned decision from both a business and moral perspective, according to the asset manager. Previously, the strategy was called the Global Dividend Plus fund.

After the merger, the investment process for the Sustainable Global Dividend Plus fund will remain the same.

It will continue to be managed by the existing portfolio management team of Fred Sykes and Jochen Breuer who co-manage the equity portfolio.

That’s when Citywire+ rated David Jehan and Vincent Li, who are both derivatives portfolio managers, will continue to manage the call options overlay, Citywire Selector has learned.

Additionally, Fidelity has confirmed that the UK-domiciled Global Property fund will continue to be managed by Citywire+ rated Dirk Phillipa.

A spokesperson said: “The search for income remains a key objective for many investors and by expanding the investment universe from real estate to global equities, we aim to provide increased opportunities for diversified sources of income. .” The merger also allows shareholders to benefit from economies of scale.

The Global Property fund has returned 1.9% over three years to the end of July 2022, compared to a Global Equities sector average of 6%.

The Sustainable Global Dividend Plus fund lost 7.5%, compared to an average return for the Global Equity Income sector of 16.7% over the same period.