ETFs Like FCSW Blend Sustainability with Strong Performance
The Fidelity Sustainable World ETF (FCSW) captures top global ESG performers through a disciplined, data-driven process, balancing sustainability with performance.
The theme of sustainability is global in nature, with both multinational corporations and global economies continuously seeking to better their environmental footprint, advance/advocate for societal changes, and/or improve transparency in the information shared with various stakeholders. Within the broad investment landscape, some firms have shown greater aptitude and a willingness to commit to sustainability initiatives, which has earned them greater standing among investors, as they understand how these initiatives can lead to better, longer-run financial performance and shareholder growth.
The Fidelity Sustainable World ETF (Ticker: FCSW) is a global equity solution that reflects companies with favourable ESG characteristics, as defined by MSCI, and leverages Fidelity Investments' quantitative investment capabilities.
Looking below the surface
FCSW’s investment universe is the MSCI All Country World Index (ACWI) ESG Leaders Index, which is constructed by applying a best-in-class selection process to companies in the regional indexes that make up the MSCI ACWI. MSCI’s ESG Leaders Ratings methodology is a proprietary framework that identifies ESG leaders and laggards based on their exposure to ESG risks and how well they manage those risks relative to peers.
After identifying the investment universe, Fidelity investment managers utilise a quantitative multi-factor model to evaluate qualified ESG securities from the index and rank them based on their fundamental attributes, namely, (i) favourable valuation, (ii) positive momentum, (iii) high-quality profile, (iv) strong growth potential, (v) non-traditional (stock characteristics uncorrelated to traditional financial statements, earnings, and stock price characteristics), and (vi) industry insights (measures that capture industry strength and weakness). In making investment selections, the management team aims to invest in companies that are reasonably valued, profitable, and have high-quality earnings and positive price momentum.
Looking at performance
Over FCSW's lifetime, the fund’s performance has been notable, delivering significant returns. Examining the fund’s year-to-date results, it has been robust, mainly due to its allocation to the technology sector (30% as of August 2025), with holdings such as Nvidia, Microsoft, Alphabet, and Taiwan Semiconductor Manufacturing as the leading contributors to its performance.
ESG Overview
From an ESG perspective, FCSW has a high rating because its underlying holdings possess strong ESG profiles. Looking at the numerical score (out of 10) for each ESG component, the fund’s environmental score reflects its limited exposure to companies involved in fossil fuels. However, what is also noticeable is the relatively strong governance rating, indicating that the companies held within the fund all demonstrate strong corporate governance. Lastly, the social score suggests that many of the fund’s holdings have no immediate links to controversial weapons, the manufacturing or selling of civilian firearms, or involvement in human rights violations.
Takeaway
The Fidelity Sustainable World ETF (Ticker: FCSW) is a turnkey solution that allows Canadian investors to gain global exposure to some of the highest-rated ESG companies, benefiting from the continued growth, as they aim to make a sustainable impact through their business operations and the areas they have a presence in.
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
