J.P. Morgan Asset Management (JPMAM) will be launching three active equity ETFs on 16 October 2018 with concurrent listings on the London Stock Exchange (LSE), Deutsche Boerse Xetra and Borsa Italiana. The three ETFs are the JPM Europe Research Enhanced Index Equity UCITS ETF (JREE), the JPM US Research Enhanced Index Equity UCITS ETF (JREU) and the JPM Global Research Enhanced Index Equity UCITS ETF (JREG). The three ETFs offer investors index-like portfolios but with an added information advantage unlike a purely passive investment. JREE will be benchmarked against the MSCI Europe Index. JREU will be benchmarked against the S&P 500 Index and JREG will be benchmarked against the MSCI World Index. All three ETFs will have a Total Expense Ratio (TER) of 25 basis points. According to JPMAM, portfolio managers will use the information provided to them by JPMAM’s research team and will take “small overweight positions in names they find attractive and small underweight names they find less attractive. As a result the portfolios maintain index characteristics while seeking incremental positive excess returns, compounded over time.” The ETFs will also integrate ESG factors whilst judging stocks, tobacco and arms manufacturers will be excluded.
BMO Real Estate Partners (BMO REP) has unveiled its F&C UK Property Fund has completed three acquisitions, valued at £49.4 million. BMO acquired F&C Asset Management in 2014 and has continued to release funds using the F&C name. The assets included in the three acquisitions will give an initial income return of 5.14 percent, as well as give more of an office and industrial sector weighting to its portfolio. The acquisition includes an industrial ware house unit in Portsmouth, an office building in Leeds and a mixed-use asset in Bath. The Portsmouth warehouse consists of 39,850 square feet of office space, and is located on the M27 providing access to Southampton and the north of London via the M3. The Minerva House in Leeds was also acquired by the fund, a 58,000 square feet, 11 storey office building. The building is let out to financial services companies including BNP Paribas, Standard Life and UBS. According to BMO the “property also has two 11,900 square feet leisure units over the basement and ground floors, which are both fully let. One small office suite remains vacant which provides scope to set a new rental tone for the building.” Finally, Cambridge House in Bath is a mixed-use office, leisure and retail property and is a designated UNESCO World Heritage site. The house comprises 52,400 square feet and has a reversionary yield of 5.81 percent.
Fidelity International, a company that provides investment management services will launch its first active ETF on the Australian Stock Exchange on the 29 October. The ETF will be paired to the MSCI Emerging Markets Index. The fund will be managed by portfolio manager Alex Duffy and it will provide investors with access to a concentrated portfolio of 30-50 emerging market companies. Active ETFs in Australia can report their holdings on a quarterly basis, in contrast to passive ETFs which must disclose their fund holdings every day. The fund aims to target companies that are well positioned to generate returns through market cycles, as well as possessing a decent corporate governance bond. Mr Duffy will be supported by Fidelity International’s global network of 140 research team and 400 investment professionals. Alva Devoy, managing director of Fidelity International in Australia, believes emerging markets are the ideal asset class for Fidelity to launch its first active ETF. Due to the global economy slowdown and their clients looking to help diversify their returns.
Gresham House, a specialist alternative asset manager is launching a fund that will provide utility-scale energy storage systems (ESS) to the National Grid with an initial public offering (IPO) target of £200 million. The Gresham House Energy Storage fund will support the growth of renewable energy sources. ESS helps the UK be less dependent on coal based electricity. According to Gresham House “the IPO and admission to trading on the Main Market of the London Stock Exchange, within the Specialist Fund Segment, is planned to complete in early November 2018.” The fund will be managed by the new energy division of Gresham House Asset Manager, which is led by Benjamin Guest. The management team and institutional investors have already invested £30 million towards the fund. Investors will see a yield of 7.0 percent, with target dividends of 7.0p (4.5p in the first year) and a target NAV total return of 8.0 percent +p.a. Once gross products have been issued, the manager expects to introduce leverage of up to a maximum of 50 percent.
Kuber Ventures, an alternative fund investment platform specialising in Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) investments, has added two new SEIS funds to its business platform. The first is the British Design Fund 2 which focuses its investment in UK based early-stage companies that aim to lead the market in innovative product design and manufacturing. The fund plans to invest at least £100,000 in each investee company in return for up to 30 percent equity with a target diversification of a minimum of five companies. The second is the British Robotics Sidecar Fund which targets investors in UK based robotics and artificial intelligence start-ups. Kuber Ventures believes that “the potential of the global robotics market to exceed £200 billion by 2021” and will leverage that potential between £25,000 and £150,000 investment in investments in investee companies. Iterations have also been made to its Guinness EIS and Worth Capital’s Start-Up Series Funds. The Start-Up Series Fund which invests in early stage consumer goods and services companies now offers a hybrid of SEIS/EIS, rather than just SEIS. Guinness EIS is a general fund looking at business with good visibility on future growth. However, following the changes made in Philip Hammond’s last budget relating to EIS rules, its iteration has restructured itself to focus on high growth business.