JP Morgan Asset Management and Pictet separately announced the launch on Tuesday of new climate change solutions funds. Both funds seek to invest in companies that have aligned their products and services with the UN’s Sustainable Development Goals, known as the SDGs.
[Corrects to make clear that the Pictet fund is not an ETF.]
JPMAM said it expanded its active equity ETF offering by listing its JP Morgan Climate Change Solutions Ucits ETF, its first Article 9 sustainable active thematic fund, on stock exchanges in London, Frankfurt, Zurich and Milan. The ETF will trade in London under the ticker T3MP and as TEMP on the other exchanges. It is the first sustainable active thematic ETF of JPMAM’s Ucits ETF range, complying with Article 9 classification, under the EU’s sustainable finance regulation. The ETF implements a proprietary investment strategy that invests in companies which are developing and scaling solutions to address climate change, the firm said. This includes companies that are producing clean energy; improving the electric grid; investing in less carbon-intensive forms of agriculture, construction, or transportation; or developing technologies to reduce waste.
Pictet announced the launch of the Luxembourg domiciled and UCITS compliant Pictet-Positive Change fund, which aims to identify companies with strong alignment of their products & services with the SDGs, those improving their alignment, and those with “the potential to improve their SDG-alignment encouraged by targeted engagement by Pictet AM’s investment team,” the firm said.
‘Targeted engagement’
“Our aim is to create a concentrated portfolio of financially robust companies that are aligning with global efforts to achieve sustainability goals and that will outperform the broader market,” said Evgenia Molotova, co-lead manager for the Pictet fund. “As the world transitions towards a more sustainable future, we believe companies whose products and services are aligned with the SDGs will benefit from the compounding of their superior returns over time. While companies increasing alignment, through targeted engagement, will benefit both from improving returns and a valuation re-rating.”
JP Morgan AM said its fund leverages the active insights of its global research and portfolio management teams, a dedicated sustainable investing team and the firm’s proprietary artificial intelligence technology called Themebot. The ETF will first use Themebot to screen nearly 13,000 stocks globally to identify companies that are acting on climate change, from established players adapting their business models to early-stage innovators developing future technologies for the low carbon transition. JPMAM’s 90+ research analyst team will then assess the fundamental investment case for each of the stocks identified by ThemeBot, to help construct a differentiated and high-conviction portfolio.
‘Meaningful solutions’
“Investors are increasingly looking for meaningful solutions to address climate change,” said Oliver Paquier, head of ETF distribution EMEA. “We are excited to help address our clients’ needs through the launch of T3MP, offering the best of JPMAM’s active management capabilities combining for the first time artificial and human intelligence in an ETF. Investors will be able to access an advanced strategy that seeks to capture innovative investment opportunities and solutions facilitating the low carbon transition, while pursuing long-term capital appreciation.”
T3MP will be managed by portfolio managers Francesco Conte, Yazann Romahi and Sara Bellenda, The addition of T3MP brings JP Morgan Asset Management’s suite of Ucits ETFs to above 30 products, with more than 8.1 billion dollars in assets under management. According to Bloomberg data per 31 March, JPMAM houses the largest active equity ETF offering in Europe and is the firm with the biggest active ETF flows globally so far this year.
The investment team behind the Pictet-Positive Change fund will use a proprietary Natural Language Processing tool to assess the alignment of a company’s products & services with the SDGs, the firm said. This systematic tool looks at positive and negative alignments for every SDG based on the conclusions of a comprehensive database of academic research. Even for positively aligned companies, the tool pinpoints negatives and potential areas of improvement.
A co-lead managers for the fund, Molotova and Yuko Takano will be supported by Peter Rawlence, Investment Manager, and two Client Portfolio Managers, Duncan Downes and Adam Johnson.
Pictet said its fund is currently registered for sale in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy (professional only), Lichtenstein, Netherlands, Norway, Portugal, Spain, Sweden and the UK.
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