JPMAM to merge two sustainability funds in restructuring plan

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JPMAM to merge two sustainability funds in restructuring plan

JP Morgan Asset Management's Global Sustainable Equity fund is to be merged into the Global Socially Responsible fund, according to an investor note seen by International Investment's sister title Investment Week.

According to JPMAM, the reason behind the merger is because the sub-fund has not gathered sufficient assets, and has "limited" prospects for growth.

The shareholder note stated that the JPM Global Sustainable Equity fund will be merged into the JPM Globally Socially Responsible fund, which will then be restructured and renamed as the JP Morgan Funds - Global Sustainable Equity fund from the end of February next year.

The fund manager told investors that the receiving sub-fund of the merger offers better prospects for growth, as demand for sustainable products continues to grow.

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"This growth can lead to economies of scale with the potential for lower fund expenses. Therefore, the board believes it is in the best interest of the shareholders to merge into the receiving sub-fund," said JPMAM's Jacques Elvinger on behalf of the board.

Following the merger, the receiving sub-fund will have a more concentrated portfolio than the current sub-fund, comprising a broader universe which includes emerging markets and China.

This means that investors will subsequently be "exposed to the associated risk".

Among the potential drawbacks for investors are one-time expenses associated with transaction costs that will be borne by the sub-fund.

JPMAM added that on the merger date, and during the two business days before that, investors will not be able to subscribe for, switch or redeem shares in their sub-fund either.