Alternative Investments/ESG: JPM AM Expands Paris-Aligned ETF Range With Two ‘Research-Enhanced’ Products

Both JPM AM ETFs will deploy bottom-up stock selection with the aim of achieving a consistently high information ratio and incremental excess returns compounded over time.

JP Morgan Asset Management (JPM AM) has introduced two Paris-Aligned Benchmark (PAB) ETFs – the JPMorgan Global Research Enhanced Index Equity SRI Paris Aligned UCITS ETF (JSEG) and JPMorgan US Research Enhanced Index Equity SRI Paris Aligned UCITS ETF (JSEU).

These ETFs, listed on several exchanges, extend the $7bn Research Enhanced Index (REI) equity range, employing an active strategy guided by proprietary research for slight deviations from index positions to generate alpha. Starting with MSCI World and MSCI USA indices, the ETFs incorporate ESG and PAB criteria, holding about 350 and 200 assets respectively. Anticipating a tracking error of 0.75-1.25%, JPM AM aims to reduce it over time. (ETF Stream)

Unlike existing offerings such as JPMorgan US Research Enhanced Index Equity ESG UCITS ETF (JREU) and JPMorgan Global Research Enhanced Index Equity ESG UCITS ETF (JREG), the new ETFs align with PAB standards, marked as Article 9 under the Sustainable Finance Disclosure Regulation. They target 50% lower greenhouse gas intensity and 7% annual decarbonization compared to their benchmarks, also excluding controversial sectors and firms.

Travis Spence, head of ETF distribution EMEA at JPM AM, noted that JSEG and JSEU aim to outperform a universe of sustainable companies while achieving Paris Agreement-aligned decarbonization.

Related Story:  JP Morgan Launches New Active, Thematic, Sustainable ETFs

Image by Peggychoucair from Pixabay

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