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JP Morgan Asset Management launches its first active equity ETFs

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JP Morgan Asset Management (JPMAM) is to launch three fully transparent active equity ETFs on 16 October 2018, with concurrent listings on the London Stock Exchange (LSE), Deutsche Boerse Xetra and Borsa Italiana.  

The funds are: the JPM Europe Research Enhanced Index Equity (ESG) UCITS ETF [JREE]; the JPM US Research Enhanced Index Equity (ESG) UCITS ETF [JREU]; and the JPM Global Research Enhanced Index Equity (ESG) UCITS ETF [JREG].
 
The three new ETFs will offer investors index-like portfolios with characteristics similar to their respective benchmarks (such as a similar risk level and similar portfolio construction framework) but, importantly, with an added information advantage unlike a purely passive investment. JREE, JREU and JREG will use JPMAM’s long-standing expertise and proven track record in research enhanced index (REI) investing, namely through a distinctive stock selection process grounded in proprietary research.
 
JREE will be benchmarked against the MSCI Europe Index. JREU will be benchmarked against the S&P 500 Index and JREG will be benchmarked against the MSCI World Index. All three ETFs will have a Total Expense Ratio (TER) of 25 basis points.
 
The ETFs will also integrate the systematic and explicit consideration of environmental, social and governance (ESG) factors, which will be built into the investment decision-making process from the outset. In addition to ESG integration, the new active equity ETFs will take the focus on ESG one step further by applying norms- and values-based screening. This means companies involved in certain sectors, like controversial weapons and tobacco, will be excluded.
 
Bryon Lake, Head of International ETFs at JPMAM, says: “We are delighted to be delivering the first-of-their-kind active equity ESG ETFs. This is the type of innovation our clients and the industry have been looking for. These ETFs seek to incorporate the best of both active and passive management and can play a versatile role in portfolios, including as a cost-effective core exposure to certain equity markets or as an asset allocation tool.”
 
“Since launching our first European ETFs, a year ago this November, we now offer solutions across equities, fixed income and alternatives. We look forward to continuing to build out our range over the coming years with active, strategic beta and passive investment strategies which leverage the best of JPMAM’s investment capabilities.”f

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