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Fidelity launches demographics-based ETF

Fidelity demographics ETF

Fidelity has created an ETF version of a global demographic fund in response to demand for actively managed listed funds.

Fidelity International has launched a new actively managed exchange-traded fund (ETF) that will track changes in demographics across the world.

The new ETF is based on the investment manager’s Global Demographics Fund, which is currently offered as a managed fund and will now also be accessible via the Australian Securities Exchange under the ticker FDEM.

The ETF will aim to generate returns above its benchmark – the MSCI All Country World Index NR – over the medium to long term through investment in companies that will grow or benefit from changes in demographic trends.

Fidelity cross-asset investment specialist Anthony Doyle said while there was uncertainty around the globe in the areas of macroeconomics and politics, demographic trends remained largely predictable.

“When we look at demographic factors such as age, education, income and employment, these have, to a large extent, not changed since the pandemic,” Doyle said.

“We continue to see the same long-term trends that we saw before COVID. For instance, the globe is still witnessing an overall growth in population, the population is still largely ageing and the middle class is still growing. These are the three main demographic factors that the fund bases its investments thesis on.

“Examining key fundamentals of companies through our bottom-up approach and assessing how business models will grow and benefit from demographic changes provides the core strategy of the fund.”

The Global Demographics Fund was established in late 2012 and is currently managed by the United Kingdom operations of Fidelity. It holds between 50 and 70 stocks with a suggested investment time frame of seven years.

Fidelity International Australia managing director Alva Devoy said the fund was being launched as a listed structure due to the high level of interest from Australian investors for actively managed ETFs.

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