JP Morgan busts through price floor with ultra low-cost US equity ETF

Mar 12th, 2019 | By | Category: Equities

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JP Morgan Asset Management has launched the lowest cost ETF in the US with the expansion of its ‘BetaBuilders’ range – low-cost, passively managed ETFs marketed as portfolio building blocks.

JP Morgan breaks price barrier with new BetaBuilders ETFs

JP Morgan has launched the new lowest cost ETF in the US which comes with an expense ratio of just 0.02%.

The firm has introduced two new funds on Cboe BZX Exchange including a broad US equity ETF and a short-duration US aggregate bond fund, both of which are weighted by market capitalization.

The JPMorgan BetaBuilders US Equity ETF (BBUS US) comes with an expense ratio of just 0.02%, a new low for the ETF industry.

Previously, the lowest ETF expense ratio in existence was 0.03%, which was held by a handful of funds.

The new ETF provides exposure to large- and mid-cap representation across the US equity market by tracking the Morningstar US Target Market Exposure Index.

JP Morgan has also announced the launch of the JPMorgan BetaBuilders 1-5 Year US Aggregate Bond ETF (BBSA US) which is linked to the Bloomberg Barclays Short-Term US Aggregate Bond Index.

The index covers bonds with maturities between one and five years that are part of the well-known Bloomberg Barclays US Aggregate Bond Index, a broad market index consisting of Treasury securities, government agency bonds, mortgage-backed bonds, corporate bonds, and a small number of foreign bonds traded in US dollars. Securities must be rated investment grade to be included in the parent index.

The fund comes with an expense ratio of 0.05% which is two basis points cheaper than its closest short-duration rivals – the Vanguard Short-Term Corporate Bond ETF (VCSH US) and the Vanguard Short-Term Bond ETF (BSV US).

“BetaBuilders represent our strategy to deliver a comprehensive range of market exposures through portfolio building blocks,” said Ogden Hammond, Global Head of Beta Product & Business Development for JP Morgan Asset Management. “These launches add to our full range of active, strategic beta, and passive ETF options, helping clients build stronger portfolios.”

The new funds complement existing JP Morgan BetaBuilders ETFs that target the equity markets of Japan, Canada, developed Europe, and developed Asia ex-Japan, as well as US-listed real estate investment trusts (REITs).

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