JP Morgan Asset Management has introduced the first ETF in Europe providing actively managed exposure to UK equities.
The ETF provides broad UK equity exposure while seeking incremental active returns compounded over time.
The JPMorgan UK Equity Core UCITS ETF (JUKE LN) has been listed on London Stock Exchange in pound sterling.
The fund, which is benchmarked against the broad market FTSE All-Share Index, implements a proprietary bottom-up investment approach that aims to deliver incremental excess returns compounded over time.
The strategy is benchmark aware, taking small overweight positions in quality businesses that are attractively valued and whose outlook is promising while taking small underweight positions in stocks not meeting these characteristics. At a sector level, weightings will be closely aligned to the fund’s benchmark.
ESG factors will also be considered when making investment decisions, although a firm’s sustainability performance may not, by itself, exclude it from the portfolio.
Day-to-day operations will be overseen by portfolio managers James Illsley, Callum Abbot, Zach Chadwick, and Christopher Llewelyn who, on average, have over 21 years of industry experience specializing in UK equities.
The ETF comes with an expense ratio of 0.25%.
Investors may obtain passive broad market exposure to UK equities for as low as just 0.04% through the £300 million Lyxor Core UK Equity All Cap (DR) UCITS ETF (LCUK LN). The higher fee for JP Morgan’s product, however, reflects the firm’s active management capabilities which may be able to deliver benchmark-beating returns over the long term.
Commenting on the launch, Olivier Paquier, Head of ETF Distribution in EMEA for JP Morgan Asset Management, said: “With the UK having maintained its position as one of the strongest performing regions since the beginning of 2021 and historically been well-placed in investors’ allocations, JUKE now offers investors a low active risk approach on UK equities, easily accessible in an ETF format for the first time.
“We believe that JUKE will offer investors a unique opportunity to invest in UK equities which, unlike a tracker, aims to deliver incremental excess returns at an attractive fee level.”