Fidelity launches active ETF to benefit from demographic trends

Fidelity International has announced the launch of a new ETF on the ASX that it said will grow and benefit from changing demographic trends.

The Fidelity Global Demographics Fund (FDEM) has a portfolio of between 50 and 70 stocks and aims to outperform its benchmark MSCI All Country World Index NR with a suggested investment time frame of seven years.

“Over the past couple of years we’ve seen a high degree of uncertainty around the globe, particularly to do with the macroeconomic and political environment, but demographic trends remain largely predictable,” said Fidelity cross-asset investment specialist Anthony Doyle.

“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 aging, and the middle class is still growing. These are the three main demographic factors that the Fund bases its investments thesis on.”

The Global Demographics Fund was originally established by Fidelity in November 2012 and is jointly managed by UK-based portfolio managers Aneta Wynimko, Alex Gold, and Oliver Hextall.

“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,” said Mr Doyle.

“These factors will continue to evolve, and our investment team can tap into Fidelity’s global resources of more than 400 investment professionals, adding speciality knowledge and unique insights.”

Fidelity managing director Alva Devoy said it had launched the strategy via a listed structure in response to increasing interest from Australian investors in actively managed ETFs.

“Active ETFs are simple to access and you can buy and sell units in the fund via your broker or licenced adviser in the same way you buy or sell a share on the ASX,” said Ms Devoy.

“The difference is that one trade gives you access to a diversified portfolio of shares actively managed by an investment expert. This structure provides our clients with greater flexibility and choice of how they access our products.”

The Australian ETF industry has reached new highs in recent months with a record-high market cap of $132.8 billion in November after net flows of $1.9 billion.

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.