JP Morgan Asset Management has expanded its line-up of ‘Research Enhanced’ equity ETFs in Europe with the introduction of a fund targeting the Japanese stock market.

JP Morgan offers a total of seven ‘Researched Enhanced’ equity ETFs in Europe.

The JPMorgan Japan Research Enhanced Index Equity (ESG) UCITS ETF has been listed on London Stock Exchange in US dollars (JREC LN) and pound sterling (JRCE LN), on SIX Swiss Exchange in US dollars (JREC SW), and on Deutsche Börse (JREC GY) and Borsa Italiana (JREC IM) in euros.

JP Morgan’s Research Enhanced ETFs aim to provide similar risk characteristics compared to broad market performance benchmarks while harnessing insights from the firm’s extensive network of analysts to pursue incremental active management.

The funds take a large number of small active positions – overweighting stocks the analysts find attractive and underweighting those they don’t – thereby seeking modest positive excess returns, compounded over time.

Typically, the ETFs aim to achieve 0.75%-1.00% in annualized excess returns with tracking errors of approximately 0.75%-1.25% versus their benchmarks.

The funds also integrate a systematic consideration of ESG investment principles into the portfolio management process. Companies violating international norms as well as those involved in certain socially and ethically questionable sectors, such as controversial weapons manufacturers and tobacco, are excluded. As such, the ETFs have been classified as Article 8 products under the EU’s Sustainable Finance Disclosure Regulation (SFDR).

The newly listed Japan ETF is benchmarked against the MSCI Japan Index which currently consists of 260 large and mid-cap Japanese companies, covering approximately 85% of the country’s total market capitalization.

The fund comes with an expense ratio of 0.25%.

JP Morgan offers a further six Research Enhanced equity ETFs in Europe targeting stocks from global developed, US, European, emerging market, China A-share, and Asia Pacific ex-Japan universes. Collectively, the suite houses around $2.5bn in assets.