JP Morgan launches RMB ultra-short income ETF

Mar 10th, 2022 | By | Category: Fixed Income

JP Morgan Asset Management has launched a new fixed income ETF in Europe providing actively managed exposure to investment-grade, ultra-short-duration debt denominated in Chinese renminbi.

JP Morgan launches RMB ultra-short income ETF

The ETF invests in RMB-denominated debt while maintaining a portfolio duration of less than one year.

The JPMorgan ETFs (Ireland) ICAV – RMB Ultra-Short Income UCITS ETF has been rolled out across Europe, coming to market with $50 million in assets.

Accumulating share classes of the fund are available on London Stock Exchange in US dollars (Ticker: JCSA LN) and pound sterling (JCAS LN), on SIX Swiss Exchange in US dollars (JCSA SW), and on Deutsche Börse Xetra (JCSA GY) and Borsa Italiana (JCSA IM) in euros.

Distributing share classes, which make payments to investors on a monthly basis, are available on LSE in US dollars (JCST LN) and pound sterling (JCTS LN) and on Xetra in euros (JCST GY).

Day-to-day management of the ETF is overseen by Aidan Shevlin, Head of International Liquidity Fund Management; Masaomi Shimada, a portfolio manager for JP Morgan’s Global Liquidity business focusing on Asian currency money market funds; and Neil Hutchison, Lead Portfolio Manager for Managed Reserves portfolios in Europe.

Collectively, the three portfolio managers have accumulated 70 years of industry experience including 50 years with JP Morgan.

The ETF is aimed at investors with near-term cash needs that are seeking enhanced yield without venturing into junk bond territory. The fund aims to maximize income while focusing on volatility management and downside protection, all the while delivering the traditional benefits of the ETF structure including liquidity and transparency.

Fixed, variable, and floating rate debt issued within or outside of Mainland China are all eligible for inclusion. The fund focuses primarily on bonds issued by the Chinese government, quasi-sovereign issuers, and policy banks, although it may also invest in mortgage-related and mortgage-backed securities to a much lesser extent.

The portfolio managers combine top-down and bottom-up investment processes in a bid to achieve an optimal portfolio in terms of liquidity, current income, and the preservation of principal while keeping the fund’s weighted average duration under one year.

The ETF comes with an expense ratio of 0.28%.

The fund is JP Morgan’s fourth ultra-short income ETF in Europe with the firm also offering products targeting short-term debt securities issued in US dollars, pound sterling, or euros.

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