JP Morgan cross-lists UCITS ETFs onto Deutsche Börse

Feb 27th, 2018 | By | Category: Alternatives / Multi-Asset

JP Morgan Asset Management (JPMAM) has cross-listed its European-listed UCITS ETFs onto Deutsche Börse, comprising two passive bond ETFs and three actively managed ETFs.

JP Morgan cross-lists all UCITS ETFs onto Deutsche Börse

JP Morgan cross-lists all its UCITS ETFs onto Deutsche Börse.

“We are pleased to be partnering with Deutsche Börse as we launch into the German market for the first time with our initial European ETF offering,” said Christoph Bergweiler, head of Germany, Austria, Central and Eastern Europe and Greece at JPMAM.

“We feel it’s important to bring this added level of choice to our clients at a time when the need to build stronger investment portfolios is as important as ever. German investors will now be able to invest in the established and recognised investment expertise of JP Morgan Asset Management within the ETF wrapper.”

Dr Martin Reck, cash market managing director at Deutsche Börse, added, “The JP Morgan Asset Management ETFs are an interesting addition to our product range, and serve to underscore the attractiveness of Deutsche Börse as a leading listing and trading platform in the European ETF market.”

Passive fixed income ETFs

The JP Morgan BetaBuilders Eur Govt Bond 1-3yr UCITS ETF (JE13 GR), designed by JPMAM’s Quantitative Beta Strategies team, tracks the JP Morgan EMU Government Bond 1-3 Year Index, providing exposure to eligible fixed rate euro-denominated domestic government debt issued by euro zone countries whose bonds are maturing within the next one to three years. The EMU index only includes liquid, bullet, fixed-rate coupon instruments. The fund’s total expense ratio (TER) is 0.10%.

The JPM USD Emerging Markets Sovereign Bond UCITS ETF (JPBM GR) tracks the JPM Emerging Market Risk-Aware Bond Index, also created by the firm’s Quantitative Beta Strategies team and derived from the flagship JP Morgan EMBI Global Diversified Index. The fund provides smart beta exposure to US dollar-denominated sovereign debt across emerging markets.

The index uses a rules-based filtering and alternative risk weighting three-step process. The first step seeks to achieve a more liquid subset of the starting universe by filtering out instruments with smaller face amounts outstanding and those that are closer to maturity. The second step seeks to limit country-specific risk by removing those countries with the highest spread risk. Finally, the third step seeks to reallocate the remaining countries to target a stable allocation of spread risk from its investment grade and high yield sub-components.

According to JPMAM, the screening and weighting process enhances diversification and gears the index towards managers who want diversification or those who face limitations on the amount of portfolio exposure they can take to individual issuers. The fund’s TER is 0.39%.

Active ETFs

The JP Morgan USD Ultra Short Income UCITS ETF (JPPS GR) provides exposure to very short maturity bonds (targeting portfolio duration of less than one year) across investment-grade corporate bonds and government debt. While the strategy can invest across sectors, the five-strong investment team – led by David Martucci, global head of the JP Morgan Global Liquidity Managed Reserves team and portfolio manager – will primarily focus on corporate and investment-grade credit.

The ETF has a return target of 0.40-0.60% over money market funds and a TER of 0.18% due to a contractual fee waiver in place until March 2021. Its gross expense ratio is 0.22%.

The JPM Managed Futures UCITS ETF (JPGM GR) and JPM Equity Long-Short UCITS ETF (JPQE GR) provide returns similar to hedge fund strategies by using advanced factor-based investing techniques. Both strategies use a systematic, rules-based investment approach, with the goal of providing returns that are uncorrelated to traditional asset classes in a liquid, cost-effective and transparent vehicle.

JPGM offers exposure to the carry and momentum factors across equities, fixed income, currencies and commodities. The strategy will be constructed bottom-up by taking long and short positions in futures markets. The ETF has a return target of cash +4% (gross of fees), a risk target of 6-8% per annum and a TER of 0.57%.

JPQE provides exposure to developed equity market factors, such as value, quality and momentum. The portfolio will be constructed bottom-up by taking long and short position in individual equity securities. The ETF has a return target of cash +4% (gross of fees), a risk target of 6-8% per annum, an expected beta of up to +0.3, and a total expense ratio (TER) of 0.67%.

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