JP Morgan Asset Management expanded its ETF offering earlier this month with the launch of the actively managed JPMorgan Active Value ETF (JAVA US).
Bryon Lake, Global Head of ETF Solutions at JP Morgan Asset Management.
Listed on NYSE Arca, the fund invests in large-cap US companies that are considered to be attractively valued given their growth potential over a long-term time horizon.
The strategy is delivered through a transparent ETF structure and leverages the expertise of JP Morgan’s Global Equities team.
It is co-managed by Clare Hart, Scott Blasdell, David Silberman and Andrew Brandon, all of whom are Managing Directors in JP Morgan’s US Equity Group and bring more than 95 years of combined industry experience.
The managers take a bottom-up approach to stock selection, assessing company fundamentals, quantitative screens, and proprietary fundamental analysis to construct a portfolio that exhibits distinct pure, large-cap value characteristics.
Stocks held by the fund, which may include REITs, will predominantly be of companies with market capitalizations similar to those within the universe of the Russell 1000 Value Index. As of September month-end, this index had a median market capitalization of approximately $13 billion and a mean market cap of $156bn – both lower than that of the regular Russell 1000.
The portfolio managers focus on investing in companies whose securities are, in their opinion, undervalued when purchased but which have the potential to increase intrinsic value per share.
In constructing the portfolio – which will typically contain around 150 stocks – the managers benefit from the insights of a team of more than 20 in-house US equity career analysts with an average of 20+ years of industry experience.
Current notable holdings include Wells Fargo, Cigna, Truist Financial, Bristol-Myers Squibb, Chevron, Raytheon Technologies and Royal Caribbean Cruises. From a sector perspective, the portfolio is presently overweight financials, materials and energy, and underweight utilities, technology, real estate and consumer discretionary.
The fund has a net expense ratio of 0.44%.
Commenting on the launch, Bryon Lake, Global Head of ETF Solutions at JP Morgan Asset Management, said: “JAVA supports the commitment to our growing active ETF suite by offering clients another tool that goes beyond the index to help investors avoid unprofitable and overvalued companies in the current environment.”
He added: “We are excited to be combining complementary Large Cap Value platform managers with a strong track record and deep experience to deliver the best of active and the best of value investing at an attractive price point.”
With this launch, JP Morgan’s US-listed ETF suite now stands at 37 products with more than $66bn in assets under management. The firm ranks as a top ten ETF issuer in the US with respect to AUM.