JP Morgan Asset Management (JPMAM) has partnered with Kasikorn Asset Management (KAsset) to create a sustainable liquid alternatives fund for Thailand professional investors.
The product, called K-SUSTAIN-UI, will initially be distributed by Kasikorn Private Banking (KPB), and will invest in the JP Morgan Multi-Manager Sustainable Long/Short Fund. Its initial public offering took place between 24 May and 28 May, and the fund is available to investors from 1 June.
“This collaboration builds on our significant partnership with KAsset throughout the last two years,” said Sherene Ban, CEO of Singapore and Southeast Asia, JPMAM, in a statement.
As the Ucits master-feeder fund for the offering, JPMorgan Multi-Manager Sustainable Long/Short Fund aims to allocate capital to companies that lead their peer groups in both sustainability characteristics and performance, and are likely to benefit from long-term sustainable trends.
Using long/short equity managers and high conviction single trades, the strategy’s long positions will focus on sustainable alpha opportunities emerging from long-term global sustainability themes, such as energy transition, resource efficiency, empowerment, health & wellness, and technology for sustainability, according to JPMAM.
The strategy will apply JPMAM’s proprietary and forward-looking ESG scoring framework.
Sustainable emerging markets equity product
Separately, JPMAM said on Monday that its emerging markets sustainable equity fund will be available to Hong Kong retail investors.
The Securities and Futures Commission (SFC) has authorised the JPMorgan Funds – Emerging Markets Sustainable Equity Fund (Sicav), a Luxembourg-domiciled Ucits, as a green and ESG fund
This is JPMAM’s first locally registered, dedicated sustainable investment product for Hong Kong retail investors. The fund was earlier made available to Singapore retail investors in March.
“As Hong Kong continues to strengthen its position as a regional green finance hub, we believe sustainable investing will increasingly become a focus not only for institutional investors but also for retail investors,” said Elisa Ng, head of Hong Kong, JPMAM in a statement.
The fund aims to provide long term capital growth by investing in emerging market (EM) companies which are “best-in-class” for sustainable business practices and sustainable financial outcomes.
Best-in-class strategies rank investible companies within their sectors and then select the most sustainable companies within a given sector. This process aims to reward ESG leaders in an industry, while also avoiding large portfolio skews toward sectors more associated with strong ESG practices or better disclosure, according to JPMAM.
The portfolio’s largest regional allocation is to Asia, with a 36.5% weighting to China, 17.6% to Taiwan and 14.6% to India, the latest fact sheet shows.
The biggest sector allocations are to information technology (24.7%), financials (21.6%) and consumer staples (21.4%). Top holdings include Taiwan Semiconductor, Alibaba, Tencent and HDFC.
The fund was first launched in Europe in 2019, and the managers, Amit Mehta and John Citron, are supported by about 40 buy-side research analysts and a dedicated sustainable investing team.
The portfolio currently has 73% lower carbon dioxide emissions (reduction from 274.1 tons to 74.7 tons, per $1 million invested in the fund) compared with the MSCI Emerging Markets Index, as of end of March 2021, said JPMAM.
The fund also meets the disclosure and reporting requirements of the recent EU Sustainable Finance Disclosure Regulation (SFDR), providing transparency around how sustainability risks are integrated into investment decisions as well as the likely impact of sustainability risks such as climate change.
While Europe remains the leader in sustainable investing, momentum is building in Asia, with net inflows into sustainable funds of close to $8bn in 2020, approximately 10 times that of 2019, according to Morningstar.