Fidelity® Select Tech Hardware Port has several promising attributes that may appeal to sustainability-focused investors.
This fund lands in the 10% of strategies with the lowest ESG risk in the Technology Sector Equity category, earning it the highest Morningstar Sustainability Rating of 5 globes. ESG risk provides investors with a signal that reflects to what degree their investments are exposed to risks related to material ESG issues, such as climate change and inequalities, that are not sufficiently managed. ESG risk differs from impact, which is about seeking positive environmental and social outcomes.
One key area of strength for Fidelity® Select Tech Hardware Port is its low Morningstar Portfolio Carbon Risk Score of 3.24 and very low fossil fuel exposure over the past 12 months, which earns it the Morningstar Low Carbon Designation. Thus, the companies held in the portfolio are in general alignment with the transition to a low-carbon economy. Currently, the fund's involvement in fossil fuels is negligible, and compares favorably with 0.18% for its average peer.
One potential issue for a sustainability-focused investor is that Fidelity® Select Tech Hardware Port doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate are more likely to align with the expectations of an investor who cares about sustainability issues. The fund exhibits high exposure (13.59%) to companies with severe controversies. From bribery and corruption to workplace discrimination and environmental incidents, controversies are incidents that may negatively affect stakeholders, the environment, or the company’s operations.