JPMAM launches first active equity ETFs
JP Morgan Asset Management (JPMAM) will launch three fully transparent active equity ETFs on 16 October 2018, with concurrent listings on the London Stock Exchange (LSE), Deutsche Boerse Xetra and Borsa Italiana.
This will include:
-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]
The three new ETFs will 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.
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 will 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 will be benchmarked against the MSCI Europe Index. JREU will be benchmarked against the S&P 500 Index and JREG will be benchmarked against the MSCI World Index. All three ETFs will have a Total Expense Ratio (TER) of 25 basis points.
The ETFs will also integrate the systematic and explicit consideration of environmental, social and governance (ESG) factors, which will be built into the investment decision-making process from the outset. In addition to ESG integration, they will 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.