J.P. Morgan Asset Management (JPMAM) has launched an actively managed Green Social Sustainable (GSS) fixed income strategy, available both as a SICAV and ETF.
JPMAM writes that the JPMorgan Funds – Green Social Sustainable Bond Fund (SICAV) and JPMorgan ETFs (Ireland) ICAV – Green Social Sustainable Bond UCITS ETF (ticker: JGRN) are some of the industry’s first actively managed funds to be benchmarked against Bloomberg’s new Global Aggregate Green Social Sustainability Bond 1-10 year index, offering investors high quality core exposure to a wide opportunity set of green, social and sustainable bonds from corporate, sovereign and supranational issuers, across developed and emerging markets.
All bonds in JPMAM’s new GSS strategy will be linked to sustainable activities, in line with the principles set forth by the International Capital Markets Association (ICMA). The bonds will also qualify as sustainable investments under EU SFDR, meaning the ‘use of proceeds’ will need to be directed to projects and activities that contribute towards a more sustainable and inclusive economy.
Managed by Stephanie Dontas, Ed Fitzpatrick and Usman Naeem and developed in partnership with JPMAM’s Sustainable Investing team, JPMAM’s GSS fixed income strategy will benefit from the expert insights of 70+ analysts working within the firm’s Global Fixed Income, Currencies and Commodities (GFICC) group. Using a proprietary framework, GFICC analysts will verify the alignment of each bond issuance to ICMA standards and conduct rigorous fundamental, quantitative and technical research. Duration risk was an important consideration in designing the strategy. Where green bonds typically have longer duration, JPMAM’s strategy offers a lower structural duration, targeting bonds between one -10 years of maturity.
Massimo Greco, Head of EMEA Funds at J.P. Morgan Asset Management says: “With the scale of the climate emergency well-documented, coupled with the rapid growth of the green, social and sustainable bond markets that saw total issuance reach nearly USD1 trillion in 2021, the need for innovative solutions has never been greater. And with bonds increasingly coming back in favour as part of a diversified portfolio, we’re delighted to be able to offer an actively managed and diversified core fixed income strategy that’s been designed with a great deal of care and consideration, as the strategy seeks to explicitly align with environmentally and socially beneficial projects.”
Both investment vehicles will be classified as Article 9 under SFDR. The Total Expense Ratio (TER) of the SICAV (C-share class) will be 50 basis points and TER of the UCITS ETF will be 32 basis points. The ETF has been listed on Euronext Dublin, the London Stock Exchange, Xetra Deutsche Borse, Börsa Italia and SIX.
