Fidelity Global Corporate Bond Research Enhanced PAB UCITS ETF

Investment rationale

The fund is a global corporate bond UCITS ETF designed to achieve income and capital growth while aligning with the Paris Agreement long-term global warming objectives by restricting the carbon emission exposure of its portfolio. It is classified as a bonds (fixed income) fund, carries a risk indicator of 3 out of 7, and has a recommended holding period of 3 years. It may appeal to investors with basic knowledge and no or limited experience of investing in funds who seek capital growth and income and understand the risk of losing some or all of the capital invested. Its role is distinct through its actively managed, research-enhanced exposure to global investment grade corporate debt combined with ESG screens and reference to a Paris-aligned benchmark.

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How the strategy works

The investment objective is to align with the Paris Agreement long-term global warming objectives by restricting carbon emission exposure and to achieve income and capital growth. The fund invests primarily in a global portfolio of investment grade corporate debt securities, with exposure generally representative of the Solactive Paris Aligned Global Corporate USD Index; the benchmark is used in the investment process and the fund’s carbon emission reduction objective will be at least aligned with it. The index tracks global investment grade corporate bonds denominated in euro, British pound and US dollar and applies ISS ESG climate analysis consistent with a 1.5°C scenario through 2050, while excluding issuers involved in activities such as tobacco, fossil fuels and controversial weapons, breaches of international norms, and certain negative sustainable development impacts. The fund may use derivatives for efficient portfolio management and currency hedging purposes; portfolio characteristics at 31.08.2026 included average maturity of 9.8 years, average coupon of 4.0%, yield to maturity of 5.3%, effective duration of 5.9, and average credit ratings of BBB+ on an exponential basis and A- on a linear basis. This Income USD share class has a distribution type of income, and income earned by the fund is reinvested in additional shares or paid to shareholders on request. The the recommended holding period is 3 years.

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Investment philosophy

• The fund is actively managed and uses a combination of quantitative, fundamental and sustainability research, drawing on Fidelity sustainable and fundamental research, to build a portfolio primarily of global investment grade corporate debt securities.

• It references the Solactive Paris Aligned Global Corporate USD Index in its investment process, with securities selected and weighted to maximise portfolio return relative to the benchmark, remain at least aligned with the benchmark’s carbon emission performance, and qualify as sustainable investments.

• The manager applies ESG screens as part of the methodology, and the fund assesses the ESG characteristics of more than 90% of its assets; the benchmark itself incorporates exclusions tied to tobacco, fossil fuels, controversial weapons, international norm breaches and certain sustainable development goal impacts.

• At 31.08.2026 the portfolio held 346 holdings across 208 issuers; the top disclosed positions included bonds from Broadcom, Essity, Gartner, Icade, eBay, Cintas, Morgan Stanley, Steel Dynamics, Mondelez and CBRE, each at 1.0% of the fund.

• Positioning as of 31 August 2026 was concentrated mainly in the USA at 59.99% of the portfolio, with notable country weights in France, the United Kingdom, Sweden and Italy; the largest sector weights were Consumer Non Cyclical at 20.19%, Banks & Brokers at 19.53%, Technology at 16.99% and Consumer Cyclical at 12.59%.

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Distinctive features

The fund combines an actively managed research-enhanced global corporate bond strategy with a Paris-aligned benchmark framework and SFDR Article 9 classification. The strategy uses sustainable and fundamental research, applies ESG screens, and provides exposure generally representative of the Paris-aligned benchmark rather than simply tracking it. As of 31 August 2026 it held 346 securities from 208 issuers, with ongoing charges of 0.25% for the share class. The ETF structure is listed across multiple exchanges and currencies, including London Stock Exchange, SIX, Xetra and Borsa Italiana.

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Risks

The fund has a risk indicator of 3 out of 7, a medium-low risk class, with potential losses from future performance at a medium-low level. bond issuers may fail to repay borrowed money or make interest payments, creating credit risk, and that when interest rates rise bonds may fall in value, so rising rates may cause the value of the investment to fall. The fund invests in overseas markets and payments may be received in a different currency, so returns can be affected by exchange-rate movements; this currency risk is not included in the summary risk indicator. The fund may use derivatives for efficient portfolio management and currency hedging, and the sustainability focus can affect performance unfavourably relative to similar funds without such focus because sustainable characteristics of securities may change over time; the fund also does not include capital protection, so investors could lose some or all of their investment.

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Asset manager

The management company is FIL Investment Management (Luxembourg) S.à r.l. FIL Investment Management (Luxembourg) S.à r.l. Ireland Branch is a member of the Fidelity group of companies. Fidelity International is the group of companies forming the global investment management organisation that provides information on products and services in designated jurisdictions outside North America. The fund is domiciled in Ireland as a sub-fund of Fidelity UCITS II ICAV.

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