JP Morgan Asset Management has expanded its line-up of ‘Research Enhanced’ equity ETFs in Europe with the introduction of a fund targeting stocks from developed market countries in the eurozone.
The fund provides broad exposure to eurozone stocks while taking small active positions.
The JPMorgan Eurozone Research Enhanced Index Equity (ESG) UCITS ETF has been listed on London Stock Exchange in euros (Acc: JREZ LN; Dist: JRZD LN) and pound sterling (Acc: JRZE LN; Dist: JRDZ LN) as well as on Deutsche Borse Xetra (Acc: JREZ GY; Dist: JRZD GY), Borsa Italiana (Acc: JREZ IM) and SIX Swiss Exchange (Acc: JREZ SW) in euros.
JP Morgan’s Research Enhanced ETFs aim to provide similar risk characteristics compared to broad market performance benchmarks while harnessing insights from the firm’s extensive network of analysts to pursue incremental active management.
The funds take a large number of small active positions – overweighting stocks the analysts find attractive and underweighting those they don’t – thereby seeking modest positive excess returns, compounded over time.
Typically, the ETFs aim to achieve 0.75%-1.00% in annualized excess returns with tracking errors of approximately 0.75%-1.25% versus their benchmarks.
The funds also integrate a systematic consideration of ESG investment principles into the portfolio management process. Companies violating international norms as well as those involved in certain socially and ethically questionable sectors, such as controversial weapons manufacturers and tobacco, are excluded. As such, the ETFs have been classified as Article 8 products under the EU’s Sustainable Finance Disclosure Regulation (SFDR).
The newly listed eurozone ETF is benchmarked against the MSCI EMU Index which currently consists of 233 large and mid-cap companies from ten developed market eurozone countries, covering approximately 85% of these countries’ total market capitalization.
The fund comes with an expense ratio of 0.25%.
JP Morgan offers a further seven Research Enhanced equity ETFs in Europe targeting stocks from global developed, US, European, Japanese, emerging market, China A-share, and Asia Pacific ex-Japan universes. Collectively, the suite houses around $2.5bn in assets.
Olivier Paquier, Head of ETF Distribution in EMEA for JP Morgan Asset Management, said: “We are thrilled to further extend our active equity ETF offering. As investors are increasingly looking for innovative tools allowing them to complement existing core exposures, add diversification, or help implement tactical views, we are committed to providing them with a comprehensive suite of transparent and cost-effective solutions. We believe our suite of actively-managed REI (ESG) equity ETFs offers investors an attractive alternative to pure passive investments.”