JP Morgan adds Canada and Asia ex-Japan ETFs to BetaBuilders suite

Aug 9th, 2018 | By | Category: Equities

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JP Morgan has unveiled two more equity ETFs as part of its ‘BetaBuilders’ range of funds – low cost, passively managed ETFs marketed as portfolio building blocks.

JP Morgan ETFs

JP Morgan’s ‘BetaBuilders’ ETFs are low cost, passively managed funds marketed as portfolio building blocks.

The new additions provide broad exposure to the equity markets of Canada and developed Asia Pacific excluding Japan.

They have been listed on Cboe BZX.

Canada

The JPMorgan BetaBuilders Canada ETF (BBCA US) tracks the Morningstar Canada Target Market Exposure Index, a free-float adjusted market-cap weighted index consisting of stocks traded primarily on the Toronto Stock Exchange.

The largest sector exposure is financials at 39.9%%, followed by energy at 20.8%. Industrials and materials each account for approximately 10% of the total weight.

There are 94 holdings in the portfolio with largest constituents being Royal Bank of Canada (7.8%), Toronto Dominion (7.6%), Bank of Nova Scotia (4.9%), and Suncor Energy (4.7%).

BBCA comes with a net expense ratio of 0.19%.

Despite the low fee, investors can source cheaper broad market Canadian equity exposure via the Franklin FTSE Canada ETF (FLCA US), which is listed on NYSE Arca and has an expense ratio of just 0.09%. FLCA tracks the FTSE Canada Capped Index and has assets under management of just $5 million.

The largest fund covering this space, however, is the $3 billion iShares MSCI Canada ETF (EWC US). EWC tracks the MSCI Canada Custom Capped Index and is considerably pricier than the other two funds with an expense ratio of 0.49%. It also trades on NYSE Arca.

Asia

The JPMorgan BetaBuilders Developed Asia-ex Japan ETF (BBAX US) tracks the Morningstar Developed Asia Pacific ex-Japan Target Market Exposure Index. The index is also weighted by free-float market-cap and covers stocks listed in Australia, Hong Kong, New Zealand and Singapore.

Financials covers over a third (37.3%) of the total index weight, with the next largest sectors being real estate (13.1%), materials (10.9%), and industrials (9.2%). The largest portfolio constituents are AIA (6.0%), Commonwealth Bank of Australia (5.6%), BHP Billiton (4.6%), and Westpac (4.3%).

This fund also has an expense ratio of 0.19%.

Again, BlackRock’s iShares manages the largest fund in this space – the $2.4bn iShares MSCI Pacific ex-Japan ETF (EPP US). Tracking the MSCI Pacific ex-Japan Index, EPP has an expense ratio of 0.49% and is listed on NYSE Arca.

The new funds complement existing JP Morgan BetaBuilders ETFs, launched in June 2018, that target the equity markets of Japan and developed Europe. Both funds have garnered considerable investor demand. The JPMorgan BetaBuilders Europe ETF (BBEU US) is currently sitting on $400m in AUM, while the JPMorgan BetaBuilders Japan ETF (BBJP US) has powered to nearly $1.8bn.

While BBJP’s rapid increase in assets marks the second fastest gathering of $1bn AUM in ETF history, it is thought that much of it came from existing JP Morgan client assets.

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