JP Morgan Asset Management has launched three new actively managed thematic ETFs focused on positive ESG impacts.
The JPMorgan Sustainable Consumption ETF (CIRC US), JPMorgan Social Advancement ETF (UPWD US), and JPMorgan Sustainable Infrastructure ETF (BLLD US) have been listed on Nasdaq with expense ratios of 0.49% each.
The funds harness JP Morgan’s proprietary natural language processing tool, ThemeBot, to screen a global universe of nearly 13,000 stocks from developed and emerging markets in order to identify companies linked to the underlying theme.
Each fund is unconstrained in its allocation to specific geographic regions and market capitalization segments.
The JPMorgan Sustainable Consumption ETF seeks out companies providing solutions to preserve natural resources, improve resource use, or reduce waste. Eligible types of firms include those enhancing sustainability in the fields of materials, production and design technologies, agriculture, water systems, and recycling.
The JPMorgan Social Advancement ETF seeks out companies that are directly facilitating the economic empowerment of people across all levels of society. Eligible firms include those that are delivering essential amenities, developing affordable housing and infrastructure, building healthcare and schooling centres, or promoting attainable financing.
The JPMorgan Sustainable Infrastructure ETF seeks out infrastructure companies that are facilitating a sustainable and inclusive economy. Eligible firms include those providing electricity, renewables, transport, water, digital connectivity, sustainable logistics, medical centres, social housing, and education.
After identifying each potential universe of suitable companies, JP Morgan’s research analysts assess the fundamental investment case for each stock to help the ETFs’ portfolio management teams construct differentiated and high-conviction portfolios. Each fund’s focus is on quality businesses with sustainable competitive advantages that are expected to achieve long-term growth.
The new listings complement the JPMorgan Climate Change Solutions ETF (TEMP US) which launched in December 2021 and utilizes a similar investment approach to seek out companies developing solutions to address climate change. TEMP houses $20 million in assets and has an expense ratio of 0.20%.
George Gatch, CEO of JP Morgan Asset Management, said: “We are seeing strong demand from clients for active sustainable investing solutions that give them access to specific companies and sectors that are driving major global trends. JP Morgan’s leadership and skill in active investing, combined with the benefits of the ETF structure, create more opportunity for our clients to target specific exposures in their sustainable investing allocations.”
Bryon Lake, Global Head of ETF Solutions at JP Morgan Asset Management, added: “Much of the rise in demand for sustainable ETFs has been met by passive strategies, which often don’t provide the nuance necessary in this complex and fast-moving space of the market. For sophisticated investors seeking intentionality when it comes to sustainable investing, we are excited to provide sustainable strategies that leverage active managers and tailored stock selection, backed by the breadth of research from our global fundamental equities team, sustainable investing team, and quantitative solutions team. We believe that these three active sustainable ETFs provide additional solutions to investors who are seeking long-term capital growth consistent with sustainable investment themes.”