Fidelity Japan Equity Research Enhanced UCITS ETF

Investment rationale

This fund is an actively managed Japan equity UCITS ETF designed to achieve long-term capital growth from a portfolio primarily invested in Japanese equities. It has a summary risk indicator of 4 out of 7 and a recommended holding period of 5 years. It may appeal to investors with basic knowledge and no or limited experience of investing in funds, who seek capital growth over that period and income, and who understand the risk of losing some or all invested capital. Its role is a Japan equity allocation that remains broadly representative of the MSCI Japan Index while applying Fidelity sustainable and fundamental research and exclusions, making it a distinct way to access the Japanese market.

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How the strategy works

The fund’s objective is to achieve long-term capital growth from a portfolio primarily made up of equity securities of companies in Japan. It invests primarily in equities of companies domiciled in Japan or exercising the predominant part of their economic activity there, and may use derivatives for efficient portfolio management and currency hedging purposes. The fund references the MSCI Japan (Net Total Return) Index / MSCI Japan Index (Net) as its benchmark for investment selection, risk monitoring, performance and carbon footprint comparison, and aims to outperform it by a target of 1% annualised gross returns over 5 years or more. The benchmark does not take ESG characteristics into account, while the fund promotes environmental and social characteristics under SFDR Article 8, aims for a portfolio ESG score above the benchmark, is accumulating, and reinvests dividends.

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Investment philosophy

• The portfolio invests primarily in Japanese equities, specifically companies domiciled in Japan or deriving the predominant part of their economic activity there, and held 125 securities from 125 issuers at 31 August 2026.

• It is actively managed using a quantitative approach that usually focuses the portfolio on the highest conviction stock recommendations identified by Fidelity’s research analysts, combining sustainable and fundamental research.

• The fund excludes companies involved in certain activities and, on an ongoing basis, considers environmental and social characteristics including carbon intensity, carbon emissions, energy efficiency, water and waste management, biodiversity, product safety, supply chain, health and safety, and human rights.

• The MSCI Japan Index is used for investment selection, risk monitoring, performance and carbon-footprint comparison; the fund has limited discretion relative to the benchmark and may hold non-index securities or different weights, but portfolio and performance are unlikely to vary significantly from the benchmark.

• Positioning at 31 August 2026 was overwhelmingly in Japan at 99.0%, with largest holdings including Mitsubishi UFJ Financial Group, Toyota Motor, Recruit Holdings, Sumitomo Mitsui Financial Group, Hitachi, and Mizuho Financial Group; sector weights are led by Industrials, Financials, Information Technology and Consumer Discretionary.

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Distinctive features

The fund combines active management with ETF structure while seeking exposure representative of the broad Japanese equity market. It applies Fidelity sustainable and fundamental research, company exclusions tied to certain activities, and an ESG tilt within an Article 8 framework. It also has ongoing charges of 0.25% on the share class. The strategy keeps close alignment with the MSCI Japan Index while still allowing active stock selection and non-benchmark positions.

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Risks

The fund has a risk indicator of 4 out of 7, a medium risk class, reflecting potential medium-level losses from future performance and sensitivity to poor market conditions. Because the portfolio is primarily Japanese equities and had 99.0% exposure to Japan at 31 August 2026, returns are driven largely by the Japanese equity market and the concentration of exposure in one country. The fund is also exposed to currency risk, as investors may receive payments in a different currency, and to liquidity risk. The fund may use derivatives for efficient portfolio management and currency hedging, and the focus on securities with sustainable characteristics may affect performance unfavourably relative to similar funds without that focus; sustainable characteristics may change over time.

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Asset manager

The management company is FIL Investment Management (Luxembourg) S.à r.l., Ireland Branch. This entity is a member of the Fidelity group of companies. The fund itself is a sub-fund of Fidelity UCITS ICAV, domiciled in Ireland and authorised as a UCITS by the Central Bank of Ireland.

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