Global X closing two risk management ETFs linked to JP Morgan indices

Jun 25th, 2019 | By | Category: ETF and Index News

Global X is to close two of its funds that were brought to market in partnership with JP Morgan.

Global X closing two ETFs linked to JP Morgan indices

The ETFs’ last day of trading will be 5 July 2019.

The funds set to close are the Global X JPMorgan Efficiente Index ETF (EFFE US) and the Global X JPMorgan US Sector Rotator Index ETF (SCTO US).

Launched on NYSE Arca in October 2014, the funds are part of Global X’s risk management suite of ETFs.

EFFE tracks the JP Morgan ETF Efficiente 10 TR Series X Index which consists of 13 underlying ETFs that target equities or bonds in developed or emerging markets, real estate investments, US Treasury bonds, US Treasury Inflation Protected Securities, gold, or a portfolio of commodities.

The index is rebalanced on a monthly basis such that the resulting portfolio would have had the largest return over the previous six months while constraining volatility below 10%.

The fund has an expense ratio of 0.88%.

SCTO tracks the JPMorgan US Sector Rotator TR Series X Index which aims to participate in the best-performing US sectors of the market while limiting beta exposure during periods of high volatility or market declines.

Rebalanced monthly, the index may include up to five out of ten US sector ETFs, choosing those with the highest performance over the past month. Only ETFs with a positive performance may be included in the index. Each ETF is equal-volatility weighted based on the sector’s realized volatility over the past month with an individual cap of 20%. Any remaining weight is allocated to a short-term Treasury bond ETF.

The fund has an expense ratio is 0.83%.

Each ETF has approximately $5 million in assets under management, a factor that likely played a significant role in Global X’s decision to close the funds.

The ETFs’ last day of trading will be 5 July 2019. The funds will be liquidated with proceeds sent to investors on 12 July.

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