JP Morgan has relaxed its ESG restrictions on its Global Income ESG fund, including doubling its revenue threshold for conventional weapons and removing restrictions on sovereign bonds relating to state military budgets.
The fund previously capped conventional weapons holdings at 5% but, according to a notice to shareholders published this month, the limit was raised to 10% from 8 June. Nuclear weapons and ‘controversial weapons’ are still banned from the fund.
The fund has also removed several restrictions around sovereign bonds, including removing a ban on investments in nations scoring less than 40 out of 100 in the Transparency International Corruption Perceptions Index. A threshold of 5% on tobacco suppliers and distributors is also being removed.
In the notice to shareholders, the fund said the changes “bring the [fund] more closely in line with the JP Morgan Asset Management exclusions policy framework” while “removing exclusions previously required by the ‘towards sustainability’ label’, which the fund no longer holds”.
Investors who disagree with the changes are able to redeem their shares free of charge.
It comes after JP Morgan Asset Management dropped defence exclusions for 129 funds earlier this year, citing “client expectations relating to defence preparedness”.
Read more: Transparency must lead the ESG reassessment of defence
