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Fidelity

Fidelity Investments Partners With Ethic in Bid to Help Advisors With ESG

The specialized platform will work with Fidelity's portfolio construction systems to help deliver investments better aligned with client values related to ESG.

According to Morningstar data, ESG funds attracted $8.9 billion in the first six months of 2019 alone, compared with $5.5 billion in all of 2018, indicating that there is demand from investors for this category of investing.

To help its advisors meet this demand, Fidelity Investments announced Wednesday that it has partnered with Ethic, which will provide advisors working with Fidelity the ability to create personalized portfolios for their clients based on the client’s ESG preferences. Ethic, whose platform is in the form of “values-aligned” separately managed accounts (SMAs), will complement Fidelity’s already existing portfolio construction resources.

Data utilized by Ethic is aggregated from multiple sources for analysis and quantitative portfolio construction, which are tied to underlying benchmarks. Advisors that sign on to use Ethic’s platform can select from existing ESG models that are built around certain themes, or can create custom allocations using direct indexing.

Fidelity was part of a $13 million Series A investment round in Ethic back in July that was led by Nyca Partners. July was a big month for the ESG firm, which also saw a new partnership with Dynasty Financial Partners.

While the companies did not note specifically how many, the offering will be available to a limited number of firms initially. Advisors that custody assets with Fidelity should get in touch with their relationship manager if interested in the program.

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