J.P. Morgan Asset Management yesterday announced the launch of three actively managed exchange-traded funds that invest in companies making sustainability a priority. These are the latest in the firm’s suite of ETFs addressing this theme.
Sustainability is currently a popular investment option as more investors become socially conscious about the companies they invest in. They not only want those securities to be financially viable, but also want to ensure their environmental impact is minimal.
New York-based J.P. Morgan acknowledged that trend last December when it introduced its JPMorgan Climate Change Solutions ETF (TEMP). To complement that product, the firm this week announced the launch of the JPMorgan Sustainable Consumption ETF (CIRC), the JPMorgan Social Advancement ETF (UPWD) and the JPMorgan Sustainable Infrastructure ETF (BLLD).
“We’re adding these three ETFs along with TEMP to have a suite of four sustainable active investments,” said Bryon Lake, global head of ETF Solutions at J.P. Morgan. “We’re seeing investors looking to increase opportunities to invest in sustainable strategy, and we think these four as a suite are very complementary of identifying different areas that investors may want to get exposure to.”
All three ETFs invest in companies with an eye toward sustainability. For instance, the Sustainable Consumption ETF invests in companies that benefit from the preservation of natural resources, the improvement of resource use or the reduction of waste. Meanwhile, the Social Advancement fund focuses on companies that benefit from the growing demand for those goods and services that facilitate economic empowerment of people across all levels of society.
Finally, the Sustainable Infrastructure fund will put money into those companies working on solutions for infrastructure that facilitates a sustainable and inclusive economy.
All three ETFs are actively traded, Lake said. The firm chose to go in that direction to give the portfolio managers more control over the daily investments should performance start to wane.
“This gives the portfolio manager discretion,” he said. “You want to invest in the companies that you believe in [while allowing the investments to give you] the performance you are looking for.”
To promote the new ETFs, J.P. Morgan is reaching out to its portfolio managers and promoting the funds on its traditional digital platforms. Lake said the firm will also work closely with investors in an effort to educate them about the value of ETFs and their active investment strategy. J.P. Morgan will also promote the benefits of including ETFs as part of a traditional investment portfolio.
The newest ETFs are already trading on the exchanges and are available through J.P. Morgan’s traditional platforms. Lake said some of the larger wirehouses may take a bit longer to make the new ETFs available as they work through traditional due diligence.
Lake believes there continues to be potential in the sustainability space and said the firm will roll out additional products similar to the ones it has already introduced, though he declined to go into details.
“We plan to continue to build out our range of products in a robust way,” he said. “Being sure that we deliver strategies that are attractive to investors is a priority of ours.”