JP Morgan launches actively managed core bond ETF

Jan 30th, 2019 | By | Category: Fixed Income

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JP Morgan Asset Management has launched the JPMorgan Core Plus Bond ETF (JCPB US) on Cboe BZX.

JP Morgan Asset Management has launched the JPMorgan Core Plus Bond ETF (JCPB US) on Cboe BZX. The actively managed ETF seeks to deliver a high level of current income through a portfolio of core fixed income exposures. "Relative to passively managed ETFs, JCPB offers a more flexible approach to a core fixed income allocation with the potential to achieve increased yield and enhanced risk-adjusted returns," said Jillian DelSignore, US Head of ETF Distribution at JP Morgan Asset Management.

Jillian DelSignore, US Head of ETF Distribution at JP Morgan Asset Management.

The actively managed ETF seeks to deliver a high level of current income through a portfolio of core fixed income exposures including corporate bonds, US Treasuries, asset-backed securities, and mortgage-backed securities.

The fund will use macro analysis to guide yield curve positioning, duration, and portfolio risk, combined with bottom-up security selection that includes dynamic sector allocation.

“JPMorgan is bringing choice to the fixed income market, delivering many of our best active ideas to areas where investors have previously had limited options,” said Jillian DelSignore, US Head of ETF Distribution at JP Morgan Asset Management. “Relative to passively managed ETFs, JCPB offers a more flexible approach to a core fixed income allocation with the potential to achieve increased yield and enhanced risk-adjusted returns.”

According to the ETF’s prospectus, up to 35% of the fund may be invested in non-investment-grade securities including non-rated debt and ‘distressed debt’, and up to 35% may be invested in foreign securities including those from emerging market issuers. No more than 10% of the fund’s weight may be invested in sub-prime mortgages.

The fund comes with an expense ratio of 0.40% due to a contractual fee waiver in place until at least February 2022. Its gross expense ratio is 0.67%.

The new launch expands JP Morgan’s suite of actively managed fixed income ETFs to eight.

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