JP Morgan Asset Management has successfully converted four mutual funds collectively housing $1.5 billion in assets under management into actively managed ETFs.
Bryon Lake, Global Head of ETF Solutions at JP Morgan Asset Management.
The $220 million JPMorgan Equity Focus ETF (JPEF US) has been listed on Nasdaq; the $820m JPMorgan Limited Duration Bond ETF (JPLD US) has been listed on Cboe BZX Exchange; and the $240m JPMorgan High Yield Municipal ETF (JMHI US) and $230m JPMorgan Sustainable Municipal Income ETF (JMSI US) have been listed on NYSE Arca.
According to JP Morgan, by converting the funds to ETFs, shareholders will benefit from intraday trading, liquidity, and reduced fees, and may benefit from greater tax efficiency.
Bryon Lake, Global Head of ETF Solutions at JP Morgan Asset Management, commented: “Investors are looking for differentiated active capabilities in the ETF wrapper. As conversions, these ETFs have a track record and scale from Day 1 and add to our active range of ETF providing tools for investors to meet their investment goals.
“We are excited to provide shareholders with greater choice and access to the benefits that active ETFs can provide, including additional trading flexibility, increased transparency, and reduced fees through transparency at attractive price points.”
Investment Strategies
The JPMorgan Equity Focus ETF invests in no more than 40 US growth and value-oriented equities with the flexibility to invest more heavily in either style based on market conditions or shift significantly to cash when attractive investment opportunities are considered scarce. The fund seeks out companies with durable franchises, sustainable competitive positions, strong management, and robust balance sheets. The ETF comes with an expense ratio of 0.50%.
The JPMorgan Limited Duration Bond ETF aims to deliver a high level of current income consistent with low volatility of principal. It invests mainly in mortgage-backed or mortgage-related securities, asset-backed securities, money market instruments, and structured investments, selecting securities that are believed to perform well over market cycles according to JP Morgan’s bottom-up fundamental research. The ETF comes with an expense ratio of 0.24%.
The JPMorgan High Yield Municipal ETF seeks a competitive yield and higher after-tax returns by focusing on high yield municipal bonds. The fund may invest up to 100% of its portfolio in securities rated below investment grade. The ETF comes with an expense ratio of 0.35%.
The JPMorgan Sustainable Municipal Income ETF invests in municipal bonds whose proceeds are earmarked for projects with positive social or environmental benefits. JP Morgan utilizes a value-oriented approach based on an extensive risk/reward analysis of factors such as income, interest rate risk, credit risk, and the transaction’s legal/technical structure. The ETF comes with an expense ratio of 0.18%.