The firm is set to launch two new UCITS-compliant funds.

Fidelity International is set to launch a new range of exchange-traded funds that will employ smart beta investment strategies to drive income.

Fidelity Global Quality Income UCITS ETF and Fidelity US Quality Income UCITS ETF are designed to meet investor demand for income through the combination of Fidelity’s active investment and aspects of passive investing, the firm said.

The trend of smart beta investing is continuing to grow. This term relates to capturing investment factors or market inefficiencies in a rules-based and transparent way". The approach is sometimes also known as factor investing. The strategies aim to capture systematically the premiums associated with one or more factor that is said to drive returns, such as yield, volatility, momentum or value. The approach is said to capture factors systematically, at a far lower cost than in an actively managed fund, for example.

The ETFs of Fidelity will provide exposure to companies that aim to pay attractive dividends. The funds aim to deliver yield whilst carefully managing risk by minimising relative sector and country exposures and security-specific positions.

“Demand for smart beta strategies has been growing in recent years and is expected to accelerate,” said Nick King, head of ETFs. “We believe our proven research capabilities and expertise can add value and increased choice for our clients.

“Our first smart beta ETFs will track Fidelity-branded indices which leverage our experience in security analysis and portfolio construction. By combining our active investment expertise with the systematic aspects of passive investing, we believe we can offer a truly differentiated product.”