Fidelity Funds in Luxembourg

Fidelity Funds in Luxembourg

Updated on Wednesday 28th July 2021

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Fidelity-Funds-in-Luxembourg.jpgFidelity funds in Luxembourg appeared as the mother company, founded in the 1960s, expanded its investment activities around the world. A fidelity fund can take the form of one the investment funds that are prescribed under the national law in Luxembourg, but a key characteristic of this type of fund is given by the interest in responsible investments
This is why fidelity funds in Luxembourg will almost always invest their assets in projects related to the protection of the environment, social projects or related to the corporate governance, with the purpose of having a real impact on societies, while assuring a high level of return on investments to funds’ clients, which have invested in these funds. 
Given that such funds take into consideration sustainable investments through which numerous parties can obtain various benefits (not only financial), in the context of the economic effects of the Covid-19 pandemics, fidelity funds in Luxembourg can be of interest for foreign businessmen. 
If you want to open an investment fund in Luxembourg as a fidelity fund, please address to our team of financial advisors for more details regarding the types of investors that can participate in these funds, the minimum capital that can be invested, the types of projects that can be funded through fidelity funds and numerous others. A part of the main characteristics of these funds will be presented in this article and we invite you to read more on this subject. 

What should foreign investors know about fidelity funds?

Prior to opening a fund in Luxembourg as a fidelity fund, foreign businessmen should first study the main characteristics of this vehicle and the objectives it has. It is important to know that the fund is created to invest in multiple projects, including projects outside Luxembourg. Below, you can find out few basic characteristics:
  • fidelity funds in Luxembourg have as one of the main purpose investments in companies from around the world (here, it is important to know that minimum 70% of the fund’s assets will be invested in overseas businesses);
  • a minimum of 50% of the fund’s assets are to be invested in companies that can prove that they implement sustainable systems or that are part of a more sustainable business market;
  • fidelity funds aim at having a 360 degrees perspective when making an investment;
  • currently, there are 1198 classes of fidelity funds;
  • fidelity funds first entered the European market in 1973, when the company established an office in London. 
Investors who want to open an investment fund in Luxembourg must know that this type of fund is listed with the Luxembourg Stock Exchange. If you need advice on how to register a fund with the local stock market, you can request consultancy services from our team of financial advisors
Fidelity funds in Luxembourg have distributed their funds and sub-funds to 47 other jurisdictions, according to the data for 2019; with regards to cross-border distribution for 2020, fidelity funds in Luxembourg distributed their assets to 46 countries.  
Please mind that the fidelity fund is seen as a risky investment, but which provides a high return on investment. Typically, funds are rated from 1 to 7, where 1 represents funds with a very low risk (but still, this does not mean that the investment is a certain one) and where the investors receive a small return on the investment, and 7, where the risk is perceived as being high, but the return on investment is a significant one. 
The fidelity fund is generally ranked with 6 on this scale from 1 to 7; this is given by the fact that the fund will invest in what it considers to be a sustainable project, but also due to the fact that the investments are made on foreign markets and the currency of a market can affect the overall estimated investment; our team can offer more details.  
This type of fund will take into consideration investments related to the following: climate change, water management, waste management, human rights matters, the supply chain and others. It must also be known that the fund does not discriminate companies based on their size and thus, small companies and large companies alike can benefit from the investments of this type of fund, as long as they qualify in all other aspects. 
It is necessary to know that the fidelity funds in Luxembourg are not limited in any way to a certain geographical region or to specific industries; investments in emerging markets are also possible. Our team of financial advisors can provide more information regarding this subject. Please contact our team of financial experts if you are interested in opening a Luxembourg fund as a fidelity fund