Fidelity’s new thematic ETFs track metaverse, clean energy and digital health

Economy
By Liam

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Fidelity launches new thematic ETF range to track big ideas from the metaverse, to clean energy and digital health

  • The range will initially consist of five new ETFs 
  • Tracked themes include the metaverse, clean energy and digital health 
  • The ETFs commenced trading in London, Germany and Switzerland

By Angharad Carrick For This Is Money

Published: 12:10 BST, 5 September 2022 | Updated: 12:25 BST, 5 September 2022

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Investment giant Fidelity will offer investors the chance to track big ideas ranging from the metaverse, to clean energy and digital health, as part of a new thematic ETF range launching today.

It will initially consist of five new products tracking clean energy, electric vehicles and future transportation, cloud computing, digital health and the metaverse.

The Irish-domiciled funds will track the Fidelity Thematic Indexes which are designed to reflect the performance of stocks most relevant to a specific theme.

Fidelity's new thematic ETF range will initially track five themes including the metaverse

Fidelity’s new thematic ETF range will initially track five themes including the metaverse

‘Thematic investing seeks to identify and capitalise on long-term, structural trends by investing across countries and sectors to capture transformative drivers of the global economy, businesses and society,’ said Nick King, Fidelity’s head of ETFs.

‘Many of these themes have an enhanced focus on sustainability as well as seeking to address specific social and environmental challenges.’

There has been a particular interest in areas which cover priorities like the environment, sustainable infrastructure and health.

A number of funds are tapping into renewable energy, which is undergoing mass adoption and is particularly pertinent in the current energy crisis.

Funds like Impax Environmental Markets have delivered healthy returns by offering investors exposure to the kind of companies that will benefit from the moves to a net zero economy.

Fidelity’s Clean Energy ETF will track companies that ‘distribute, produce or provide technology or equipment to support the production of energy from solar, wind, hydrogen and other renewable sources.’

The metaverse has also proved popular theme among investors amid growing interest surrounding the growth of virtual reality technology.

Invesco recently launched a fund dedicated to companies focused on the metaverse. The Invesco Metaverse Fund, managed by Tony Roberts and James McDermottroe, will invest in companies across Europe, Asia and the US.

It comes after AXA IM launched a metaverse fund earlier this year, managed by Pauline Llandric and co-managers Tom Riley and Jeremy Gleeson.

Fidelity said its own Metaverse fund will ‘reflect the performance of a global universe of companies that develop, manufacture, distribute, sell products or services related to establishing and enabling the Metaverse.’

Fidelity’s ETFs will have a 0.5 per cent ongoing charge and have today started trading on Deutsche Borse Xetra, SIX Swiss Exchange and the London Stock Exchange.

Could big picture trends help you profit?

Investors trying to think long term in volatile times can find a vast array of funds and trusts anticipating trends, such as population growth and increased investment to combat climate change. 

But what do you need to know about this type of investing and what are the big ideas that you could back? 

This is Money recently looked at what investors should consider before risking their money in any kind of thematic fund, and which big developments might offer the most richest opportunities over the next few decades. 

Thematic investing really gives people something to get their teeth into and can be easy to understand, according to Juliet Schooling Latter, research director of FundCalibre.

‘There is also a reasonable choice. For example, there are a number of exciting themes that could lead to a very different world in the next decade – climate change and decarbonisation, the rise of electric and autonomous vehicles, cloud computing, cryptocurrencies and delivery drones to name a few.’

But she warns it’s not as simple as identifying a long-term theme, investing your money in companies playing the theme, and sitting back and waiting for the next 30 years or so.

‘Sometimes, a long-term theme is identified, but takes many years to start to come to fruition.

Investing experts also suggest funds and trusts giving exposure to some of the most exciting trends. 

> Read: Which big theme investments will make money in the next 20 years?

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