J.P. Morgan Asset Management (JPMAM) has launched three fully transparent active equity ESG ETFs on SIX Swiss Exchange.
The three new ETFs offer investors index‐like portfolios with characteristics similar to their respective benchmarks (such as a similar risk level and similar portfolio construction framework) but, importantly, with an added information advantage unlike a purely passive investment.
The three ETFS are as follow:
– JPM Europe Research Enhanced Index Equity (ESG) Ucits ETF [JREE]
– JPM US Research Enhanced Index Equity (ESG) Ucits ETF [JREU]
– JPM Global Research Enhanced Index Equity (ESG) Ucits ETF [JREG]
JREE, JREU and JREG will use JPMAM’s long‐standing expertise and proven track record in research enhanced index (REI) investing, namely through a distinctive stock selection process grounded in proprietary research.
JPMAM’s experienced research team, comprising over 65 fundamental career analysts, dotted across the world’s top financial centres, provide stock‐specific insights to portfolio management teams. Using this information advantage, portfolio managers take small overweight positions in names they find attractive and small underweights in the names they find less attractive. As a result the portfolios maintain index characteristics while seeking incremental positive excess returns, compounded over time.
JREE is benchmarked against the MSCI Europe Index. JREU is benchmarked against the S&P 500 Index and JREG is benchmarked against the MSCI World Index. All three ETFs have a Total Expense Ratio (TER) of 25 basis points.
The ETFs also integrate the systematic and explicit consideration of environmental, social and governance (ESG) factors, which are built into the investment decision‐making process from the outset. In addition to ESG integration, the new active equity ETFs take the focus on ESG one step further by applying norms‐ and values‐based screening. This means companies involved in certain sectors, like controversial weapons and tobacco, will be excluded.