JP Morgan Asset Management (JPMAM) has become the latest investment manager to lift exclusions to defence on dozens of UK and European funds.
According to notices issued to shareholders, the asset manager will lift the restriction on 95 Luxembourg-based funds, 29 Ireland-domiciled funds and five ESG funds in the UK.
The notices cite “evolving client expectations relating to defence preparedness” and the “evolving regulatory environment” for the changes.
The conventional weapons 10% revenue threshold has been removed from the Luxembourg and Irish funds while the Irish funds will also be able to allocate to issuers linked to nuclear weapons programmes in countries that have signed the non-proliferation treaty.
All of the European funds are Article 8 funds and include its two largest ETFs in the region – the US Research Enhanced Index Equity Active fund and its global equivalent which are worth $13 billion and $10 billion respectively.
Other global asset managers, including Franklin Templeton, Columbia Threadneedle, DWS and Allianz Global Investors, have made similar changes to their investment mandates in the wake of the pledge by Nato members to increase defence spending to 5% of GDP.
JP Morgan was also one of five banks to back the establishment of a European defence bank. Back in August, JP Morgan, along with ING, Commerzbank, LBBW and RBC Capital Markets pledged to provide financial and technical support to the Defence, Security and Resilience Bank.
The new bank announced it would invest in “defence modernisation and supply chain resilience” across Europe and the Indo-Pacific region.
And in October, JP Morgan also announced that it would invest $1.5 trillion over ten years in US industries “critical to national economic security and resiliency”.
