JP Morgan adds ultra-short T-Bills ETF to ‘BetaBuilders’ suite

Feb 24th, 2021 | By | Category: Fixed Income

JP Morgan Asset Management has expanded its ‘BetaBuilders’ suite in Europe with the launch of an ETF providing low-cost access to ultra-short-duration US Treasury securities.

JP Morgan adds ultra-short US Treasury ETF to ‘BetaBuilders’ suite

JP Morgan has launched one of the cheapest ultra-short-duration US Treasury ETFs in Europe.

The JPMorgan BetaBuilders US Treasury Bond 0-3 Months UCITS ETF offers investors a cash management tool by investing in US Treasury securities while targeting an ultra-short duration profile.

The fund has listed on London Stock Exchange in US dollars (BB3M LN) and pound sterling (BBM3 LN) and comes with an expense ratio of 0.07%.

Income is accumulated within the portfolio.

The fund is linked to the ICE 0-3 Month US Treasury Notes & Bills Index which consists of US dollar-denominated, fixed-rate securities issued by the US Treasury. Zero-coupon and inflation-protected bonds are not eligible for selection.

The index targets securities with at least $300 million outstanding and that are positioned right at the front end of the yield curve with less than three months remaining to maturity.

The fund becomes the cheapest ETF in Europe to offer this type of exposure, competing solely against the $440m SPDR Bloomberg Barclays 1-3 Month T-Bill UCITS ETF (ZPR1 GY) which costs 0.10%.

Several issuers offer US Treasury ETFs targeting bonds with remaining maturities up to one year including DWS, Vanguard, BlackRock, Amundi, and Invesco, as well as JP Morgan itself. These funds come with expense ratios between 0.05% and 0.07%. The largest is the $7.1 billion iShares $ Treasury Bond 0-1yr UCITS ETF (IBTU LN) which costs 0.07%.

US Treasuries command a triple-A credit rating from Moody’s, Fitch and DBRS, and AA+ from S&P.

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