J.P. Morgan has announced in a press release the launch of their first active, sustainable ETF, the JPMorgan Climate Change Solutions ETF (TEMP). The fund is one that utilizes artificial intelligence along with the insights of J.P. Morgan Asset Management’s portfolio management teams to identify securities and manage the portfolio.
TEMP seeks to invest in companies that are working to find solutions to climate change; these companies include renewable energy producers, companies that are updating the electric grid for renewable energy, companies that are reducing waste through new technologies, and companies that are reducing emissions within construction, transportation, and agriculture.
The ETF uses an AI, Themebot, to analyze almost 13,000 stocks and their associated data points to find companies that are working to address the climate crisis, thereby creating the universe of investible securities for the fund. From these securities, analysts then look into the fundamentals to build a portfolio of securities that is both high conviction and differentiated.
“While nearly all sustainable U.S. ETF assets are managed through passive indices, this fund takes an active approach to finding companies that are developing solutions to address climate change,” said George Gatch, CEO of J.P. Morgan Asset Management, in the press release. “We believe that active management provides a great pathway to achieving clients’ sustainability goals, and TEMP is the first in the series of sustainable, thematic, active strategies we are building to address client demand in this area.”
As an actively managed fund, the portfolio managers can also select securities that were not identified by Themebot, but will consider material sustainability factors when doing so. The portfolio managers will also actively engage with companies on material issues as part of their investment process.
“Investors we talk to are increasingly looking for investment products that will provide meaningful investment opportunities across a range of industries and geographies, and we’re excited to help address our clients’ goals through the launch of TEMP,” said Bryon Lake, global head of ETF solutions at JPMAM. “This active ETF leverages the best of JPMAM’s global active management capabilities to give investors access to purposeful investment opportunities, while pursuing long-term capital appreciation.”
TEMP carries an expense ratio of 0.49%.
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