JPMAM to close 2 sustainable funds
JP Morgan Asset Management (JPMAM) has announced it will close its two sustainable infrastructure funds.
The firm said it will terminate its JPMorgan Sustainable Infrastructure Fund and JPMorgan Sustainable Infrastructure Active ETF (Managed Fund) on 29 August.
JPMAM said the product had “failed to gain traction” with the Australian market. The active ETF is only $1.7 million, while the open-ended fund managed by Victor Li and Fred Barasi is $10.8 million.
In a statement to the ASX for the active ETF, JPMAM said: “We regularly review our products to ensure they are meeting the demands of the marketplace and they have the necessary scale to operate in the best interest of unitholders.
“Following a recent review of the fund, we have decided the fund has not gathered sufficient assets and has limited prospects for future growth. As a result, we believe it is in the best interest of the unitholders to terminate the fund.
“While the investment case for sustainable investing remains strong and we remain committed to sustainable strategies, this particular strategy has regrettably not gained traction with Australian investors.”
Upon termination on 29 August, JPMAM said it will sell the fund’s assets in order to return the net proceeds and any remaining income to investors based on the number of units they hold which is expected to be completed by the end of September 2024.
The JPMorgan Sustainable Infrastructure Fund has returned 0.2 per cent over one year to 30 June versus returns of 18.9 per cent by the MSCI ACWI Index over the same period.
Earlier this week, Schroders announced its own changes to sustainable funds, with the Sustainable Global Core Fund being renamed as the Global Core Fund.
Explaining the change, Schroders said the criteria for sustainable labelled funds, both in Australia and abroad, had reached “significantly higher standards” since 2020 when the fund was renamed to the Schroder Sustainable Global Core Fund to better reflect the increased level of ESG integration and more stringent exclusions that had been incrementally adopted at that time.
“The direction of travel in Australia indicates stricter requirements for sustainable labelled funds can be expected, albeit without absolute certainty on either timing or specific implementation requirements, which could more significantly impact the investment universe of the fund,” it said.
“Given the primary focus of the fund is to deliver incremental alpha with limited index-relative risk, excluding larger index stocks on sustainability considerations could become more challenging.”
AUTHOR
Laura Dew
Recommended for you
Financial advisers nervous about the liquidity of private markets funds for their retail clients are the target of fund managers launching semi-liquid products which offer greater flexibility and redemptions.
Former Pendal head of multi-asset Michael Blayney has been appointed as a member of the investment committee at specialist managed accounts provider Evidentia Group.
Australian Ethical has seen its funds under management surpass $13 billion in the latest quarter, thanks to retail and wholesale net flows of $173 million but a transition project by Mercer affected superannuation flows.
A salary guide has unpacked the salaries earned in various asset classes, with managing directors in one space earning north of $500,000.
