JP Morgan has today launched two new exchange-traded funds (ETFs) on the London Stock Exchange, including the first ever “actively managed UK equities UCITS ETF”.
The JPMorgan UK Equity Core UCITS ETF (JUKE) will invest in many of the companies contained in the FTSE All-Share index, but position sizes will differ depending on the managers conviction, with small under and overweights taken where appropriate to make returns above those of the benchmark.
At a sector level, however, weightings are expected to be closely aligned to those of the benchmark.
Already, the portfolio contains 155 holdings, with its largest exposure to Shell (7.2% of assets under management (AUM)), AstraZeneca (7.1%) and HSBC (4.8%).
It will be run by four managers, including Christopher Llewelyn and James Illsley who have 37 and 32 years’ worth of experience in the industry respectively.
Both managers have already worked with each other on the £1.8bn JPM UK Equity Core fund since Illsley joined as co-manager in 2013.
Returns are up 69% since Illsley came on board, outperforming its peers in the IA UK All Companies index by 11.2 percentage points.
Total return of fund since Illsley joined
Source: FE Analytics
The new fund, which will also be run by Callum Abbot and Zach Chadwick, both of whom co-managed the JPM UK Equity Core fund, will have an ongoing charge of 0.25%.
Oliver Paquier, head of ETF distribution in EMEA at JP Morgan, said: “We believe that JUKE will offer investors a unique opportunity to invest in UK equities, which unlike a tracker, aims to deliver incremental excess returns at an attractive fee level.”
Also launched today was the JPMorgan Climate Change Solutions UCITS ETF (T3MP), which will invest in companies finding solutions to climate change, such as businesses creating clean energy and low-carbon technologies.
An artificial intelligence (AI) system called ‘Themebot’ will screen and rank more than 13,000 stocks based on their sustainability credentials, then the managers will analyse the resulting companies and select allocations.
Around 54 assets are held in the portfolio at present, but this may expand to 120 as managers Francesco Conte, Yazann Romahi and Sara Bellenda seek out new opportunities. Investors in T3MP will be charged a slightly higher fee of 0.55%.
The two new launches add to their existing range of 29 UCITS ETF products, which have collective AUM exceeding $8bn (£6.5bn).