Europe Sustainable Equity Fund

JPMF – Europe Sustainable Equity Fund provides access to best-in-class sustainable companies, backed by a five-year track record and the Central Labelling Agency’s Towards Sustainability label¹.

Invest in Europe’s leading sustainable companies

In a world where sustainability increasingly matters to companies and investors alike, our Europe Sustainable Equity Fund’s ability to capture environmental, social and governance (ESG) opportunities and manage ESG risks can help you to do well while doing good.

The fund is compliant with Article 8 of the European Union’s Sustainable Funds Disclosure Regulation (SFDR), has an AAA ESG rating from MSCI, and has a weighted average carbon intensity that is 60% lower than the MSCI Europe benchmark. It also has a top decile performance record since its launch in December 2016, allowing investors to invest sustainably while enjoying attractive returns relative to the broad European market
(data as of 31 December 2021 ).

Benefit from a best-in-class approach

The fund works by investing in companies with best-in-class sustainability credentials, while seeking to reduce exposure to, or exclude, industries or stocks that are unsustainable².

Best-in-class stocks either lead their peer groups in terms of their sustainability performance (for example, by decreasing their carbon emissions) or offer products and services that are helping to solve global sustainability challenges (for example, by selling products that help their customers reduce their carbon emissions).

Our team of research analysts and portfolio managers identify best-in-class sustainable companies via rigorous stock research, while we also engage with the companies to influence behaviour and encourage best practice. The aim is to invest in companies that are leading the charge to solve at least one of the following critical environmental and social issues: climate change mitigation; responsible resource consumption; social cohesion; and workforce diversity.

The characteristics of ESG leaders

Source: J.P. Morgan Asset Management. For illustrative purposes only.

Uncover sustainable leaders in unexpected places

While the fund aims to invest in companies that are providing solutions to the critical ESG issues of the day, it is not wedded to any particular theme or sector. This willingness to invest broadly across markets, including in areas that may not be immediately apparent when you think of sustainability, is a key driver of the fund’s success.

The capital goods sector, for example, is not often at the top of the list when it comes to sustainable leadership. However, European capital goods companies are helping to lead the transition to a low carbon economy, either by improving the energy efficiency in their end markets or by helping replace fossil fuels with green energy. A current stand-out is French industrial automation company Schneider Electric, which provides energy management solutions to help its customers achieve their sustainability targets, while embedding strict sustainability targets in its own business goals.

The banking sector is another area that can be overlooked by sustainable investors. However, Europe’s lenders will play a critical role in providing the trillions of euros in debt financing that governments and companies will need if they are to meet their carbon reduction goals by 2030. We aim to identify the leaders in green lending—banks, such as Credit Agricole and BNP Paribas, which are among the top green bond underwriters globally, or ING, KBC and Natwest, which have all made pledges to decarbonise their loan books.

Banks are also among the leaders in workforce equality. NatWest, for example, is one of only five companies in the 2020 European Gender Diversity Index that has both a female CEO and CFO or COO.

Engage to maximise change

As well as our stock research, the fund drives positive change by engaging with companies on sustainability issues. Engagement allows the fund to encourage the companies that it invests in to take action where the greatest ESG impact can be achieved. Even sustainable leaders have room for improvement.

Take Novo Nordisk, for example. The Danish drug maker has led the way with its commitment to help people with diabetes in low- and middle-income countries by lowering the price it charges for insulin. However, we identified a diversity mismatch in the company’s workforce, with women making up just 24% of the company’s senior management team. The company has now set a 50/50 senior management gender balance target tied to short- and long-term incentive plans.

Follow fundamentals, not fads

Another key reason why we believe the fund is able to capitalise on today’s evolving ESG opportunities is its agile portfolio, which can respond quickly to changing market conditions.

Navigating the ESG landscape: key portfolio adjustments in 2021

Largest increases / decreases – last 12 months ending 31 December 2021

Source: Factset. The fund is an actively managed portfolio. Holdings, sector weights, allocations and leverage, as applicable are subject to change at the discretion of the Investment Manager without notice. The benchmark is for comparative purposes only, unless otherwise indicated in the Fund’s Investment Objective and Policy.

The positive impact of the fund’s agile positioning can be clearly seen in 2021, when exposure to renewable energy and utility companies was reduced significantly through the year.

Although supported by long-term climate policy action, our bottom-up analysis suggested that renewable energy stocks were expensive after performing strongly in 2020. Our research highlighted more attractive ESG opportunities in the defensive pharmaceuticals sector, which was benefiting from a market rotation away from cyclicals, and in the banks sector, which was supported by hopes for a strong post-Covid economic rebound.

This core, agile approach to ESG investing means the fund should always be positioned to weather the changing ESG landscape.

Find out more

Visit our website to discover how our flagship European Sustainable Equity Fund could help your clients gain the ESG exposure they want, while generating the long-term returns that they need.

¹ The Towards Sustainability label has been awarded to the JPMorgan Funds – Europe Sustainable Equity Fund from November 2020 to June 2022. The Central Labelling Agency is a Belgian not-for-profit association (towardssustainability.be).
² Full details can be found in the JPMorgan Funds – Europe Sustainable Equity Fund Exclusion Policy.

For Professional Clients / Qualified Investors only – not for Retail use or distribution.

This is a marketing communication and as such the views contained herein do not form part of an offer, nor are they to be taken as advice or a recommendation, to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are, unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Changes in exchange rates may have an adverse effect on the value, price or income of the products or underlying overseas investments. Past performance and yield are not a reliable indicator of current and future results. There is no guarantee that any forecast made will come to pass. Furthermore, whilst it is the intention to achieve the investment objective of the investment products, there can be no assurance that those objectives will be met. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/emea-privacy-policy. As the product may not be authorised or its offering may be restricted in your jurisdiction, it is the responsibility of every reader to satisfy himself as to the full observance of the laws and regulations of the relevant jurisdiction. Prior to any application investors are advised to take all necessary legal, regulatory and tax advice on the consequences of an investment in the products. Shares or other interests may not be offered to, or purchased, directly or indirectly by US persons. All transactions should be based on the latest available Prospectus, the Key Investor Information Document (KIID) and any applicable local offering document.

These documents together with the annual report, semi-annual report, the articles of incorporation and sustainability-related disclosures for the Luxembourg domiciled products are available in English free of charge upon request from JPMorgan Asset Management (Europe) S.à r.l., 6 route de Trèves, L-2633 Senningerberg, Grand Duchy of Luxembourg, your financial adviser, your J.P. Morgan Asset Management regional contact or at https://am.jpmorgan.com. A summary of investor rights is available in English at https://am.jpmorgan.com/lu/investor-rights. J.P. Morgan Asset Management may decide to terminate the arrangements made for the marketing of its collective investment undertakings. In Switzerland, JPMorgan Asset Management (Switzerland) LLC, Dreikönigstrasse 37, 8002 Zurich, acts as Swiss representative of the funds and J.P. Morgan (Suisse) SA, 8 Rue de la Confédération, 1204 Geneva, as paying agent of the funds. JPMorgan Asset Management (Switzerland) LLC herewith informs investors that with respect to its distribution activities in and from Switzerland it receives commissions pursuant to Art. 34 para. 2bis of the Swiss Collective Investment Schemes Ordinance dated 22 November 2006. These commissions are paid out of the management fee as defined in the fund documentation. Further information regarding these commissions, including their calculation method, may be obtained upon written request from JPMorgan Asset Management (Switzerland) LLC.

This communication is issued in Europe (excluding UK) by JPMorgan Asset Management (Europe) S.à r.l., 6 route de Trèves, L-2633 Senningerberg, Grand Duchy of Luxembourg, R.C.S. Luxembourg B27900, corporate capital EUR 10.000.000. This communication is issued in the UK by JPMorgan Asset Management (UK) Limited, which is authorised and regulated by the Financial Conduct Authority. Registered in England No. 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP.

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