Alternative Investments/ESG: JP Morgan Launches Carbon Transition Focused Equity ETF

The JPMorgan Carbon Transition Global Equity UCITS ETF (JPCT) trades on Xetra and Börse Frankfurt.

The new JPM Carbon Transition Global Equity UCITS ETF – USD (acc) from JPMorgan Asset Management provides investors exposure to companies that contribute to a reduction in carbon dioxide emissions. These are large or medium-size companies from industrial countries globally and are constituents of the MSCI World Index. (INTERNATIONAL INVESTMENT)

JPM Carbon Transition Global Equity UCITS ETF – USD (acc)

The new ETF will track the JPMorgan Asset Management Carbon Transition Global Equity Index.

The Index captures the performance of companies from the MSCI World Index.

These are selected and weighted based on those that have been identified through its rules-based process as best positioned to benefit from a transition to a low-carbon economy. They do this by effectively managing their emissions, resources, and climate-related risks.

By closely tracking the carbon transition index, JPCT aims to provide similar regional, sector, and return characteristics to a traditional global equity benchmark. However, it reduces carbon intensity by at least 30% and targets a year-on-year self-decarbonization of at least 7%.

The result is a fund that aims to insulate investors from the risks of climate change. It allows them to seize the investment opportunities made possible by the transition to a low carbon world.

The ETF has an ongoing charge of 0.19%.

Carbon transition readiness

Commenting on the launch, Olivier Paquier, Head of ETF Distribution in EMEA, said: “Many investors are considering the carbon transition readiness of their portfolios, coupled with a need to maintain broad diversification, a low tracking error, and cost-efficiency.”

“Our carbon transition global equity ETF should help meet those needs, as clients look to integrate low carbon transition considerations when investing in global equities.”

Jennifer Wu, Global Head of Sustainable Investing at JPMorgan Asset Management, added: “Investing in carbon transition aware strategies needs to start now. Differences are emerging, between the potential winners and losers in the low carbon transition, and by acting early, before climate risks and opportunities are fully priced in, investors can capture potentially significant returns as prices continue to adjust.

“We’ve had interest from a range of clients looking to leverage our framework to help meet their specific sustainable investment goals.”

Related Story:    KRBN, A New ETF, Could Move The Needle on Carbon Pricing

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