Launched in 2003, this fund, formerly known as the Intrepid Sustainable Equity Fund, is designed to provide long-term capital appreciation by investing in companies considered leaders in sustainability. It has a 5-star ‘Morningstart’ rating, which means the fund has a good risk-adjusted return. However, despite its policy to invest in companies that meet the ESG criteria (at least 80%), its portfolio doesn’t primarily consist of businesses, enterprises or industries which actively are associated with and strive for impact in sustainability. Overall, it seems like the fund is attempting to generate profits by exploiting the concept of sustainability, which may be seen as ‘greenwashing’. This therefore gives it a below average rating score.
As of 08/31/2021, the JPMorgan US Sustainable Leaders Fund has an average market cap of ($397.24) and 0.96 (3-year) Beta, meaning that it has low volatility compared to the market. The fund assets were $133.23 million, with a 43.76% (trailing 12 month) turnover ratio. Out of a current 59 holdings, focused in the US, its main holdings and investments include companies such as Microsoft Corp (8.5%), Apple Inc (4.6%), Walt Disney Co. (2.4%), Mastercard (3.1%), Bank of America (2.9%) and Citigroup Inc. (2.3%). The main equity sectors that it is involved in are communication services (5.4%), Financials (12.8%), Industrials (11.1%) and Information tech (32.7%). The lack of companies and industries here whose key focus is tackling climate change and sustainability reveals that the fund is more interested in meeting criteria and generating profit for investors than achieving actual impact.
This Fund’s approach consists of primarily investing in large-cap and mid-cap common stocks in companies that are sustainable leaders based on a proprietary scoring methodology. This makes it a ‘Large Blend’ Category due to the range of asset classes it invests in. Here, they incorporate the ESG (environmental, social and governance) information in their investment decision-making. Usually, this fund aims to invest at least 80% of its assets in US companies whose equity securities meet the sustainability criteria. The minimum initial investment is $1m. Despite this high percentage, it appears the fund as well as its main companies are not directly striving towards social impact but simply meet the ESG criteria. In the future, the Fund should instead try to invest in companies and charities that are actively focused in the sustainability industry.
The JPMorgan US Sustainable Leaders fund is managed by 3 main portfolio managers, who have all been at the firm since 2019. Executive directors Andrew Stern (with 13 years’ experience at JP Morgan) and Jonathan Tse (17 years’ experience) as well as managing director Wonseok Choi (19 years’ experience). While all are highly experienced in the industry of financial investments, they lack specific experience concerning sustainability. The Fund should aim to have directors with sustainability-focused professional backgrounds as well as financial in order to effectively invest in sustainable businesses.
Overall, while on the surface this JP Morgan fund seems to promote and invest heavily in ESG companies and sustainability, in reality they are using the guise of corporate social responsibility to further their profits and reputation. Going forward, they should re-focus their investments to attempt to promote and increase sustainability rather than just the Fund itself.