JP Morgan Asset Management, the investment arm of the US’ biggest bank, has launched two new Dublin funds: one an international portfolio excluding the US for investors looking to reduce their exposure to Silicon Valley tech giants; and a global fund extending its $1.2bn higher-active equity range.
The JPM Global ex US Research Enhanced Index Equity Active UCITS ETF (JXUS) is designed for investors looking to lower their reliance on a US stock market dominated by tech titans.
Run by head of global and international research Piera Elisa Grassi and portfolio managers Winnie Cheung, Nicholas Farserotu and Sebastian Wiseman, it will target capital growth ahead of the MSCI World ex USA index while staying sector, region and style neutral. The conventional MSC World index has 72.5% exposure to the US.
As part of JPM’s $37.1bn range of “research-enhanced” index funds it has a lower TER of 0.25%.
Travis Spence, global head of ETFs at JP Morgan Asset Management, said: “Investors are rethinking how they build global equity allocations, including how they diversify beyond US exposures and how they balance the pursuit of alpha with tighter risk control.”
The JPM Global Equity Active UCITS ETF (JGLE) will take more active risk against the MSCI All Country World index and aim to beat the benchmark with around 200 stocks selected through its quantitative analysis and fundamental research.
As an Article 8 sustainable fund, it will also exclude companies engaged in the making of controversial weapons or deriving more than 10% of revenue from tobacco. It will be managed by Philippa Clough, Callum Abbott and Erna Ceka and charge a total expense ratio (TER) of 0.47%.
Both active ETFs have listed in London, Frankfurt, Milan and Zurich. JPMAM is Europe’s biggest active ETF provider with $46bn under management.
Dimensional Fund Advisors launched the $132m Dimensional Global Ex US Core Equity Market UCITS ETF (DPXM) earlier this year.
Our view
David Batchelor, senior analyst at QuotedData, said: “JPMorgan’s latest launches underline two of the clearer themes in Europe’s active ETF market: demand for low-cost active funds, and growing unease around US concentration in global equity portfolios. JXUS looks designed to meet that second point directly, offering investors a way to keep global developed-market exposure while reducing reliance on the US mega-cap technology trade. The more active JGLE, meanwhile, shows JPMorgan continuing to push beyond enhanced index strategies into higher-conviction equity ETFs. The launches are unlikely to change the market overnight, but they do reinforce JPMorgan’s lead in European active ETFs and show how large managers are using the wrapper to package strategies that sit between traditional passive exposure and fully active fund selection”.
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