JP Morgan unveils actively managed short-duration bond ETF

Mar 3rd, 2021 | By | Category: Fixed Income

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JP Morgan Asset Management has launched an actively managed ETF in the US providing exposure to a wide range of short-duration fixed income securities.

JP Morgan ETFs

The fund is led by Cary Fitzgerald, Managing Director, and Steven Lear, US Chief Investment Officer at JP Morgan Asset Management.

The JPMorgan Short Duration Core Plus ETF (JSCP US) has listed on NYSE Arca and comes with an expense ratio of 0.33%.

The fund aims to generate a high total return consistent with the preservation of capital by investing in short-term bonds from issuers globally.

The fund employs a multi-sector approach to create a diversified portfolio.

Eligible securities include corporate bonds, Treasury and agency bonds, asset-backed and mortgage-backed securities, private placements, credit risk transfer securities, credit-linked notes, restricted securities, and variable and floating rate instruments.

The fund will invest primarily in investment-grade securities issued in the US but has the flexibility to allocate up to 30% of its assets to high-yield bonds and 25% to securities issued outside of the US, including emerging market debt. Currency risk will be managed with approximately 85% of portfolio securities either denominated in or hedged back to US dollars.

The fund will maintain a weighted average duration of under three years.

Portfolio management is led by Cary Fitzgerald, a Managing Director within JP Morgan’s Global Fixed Income Currency & Commodities group, and Steven Lear, US Chief Investment Officer at JP Morgan Asset Management. The duo collectively have 62 years of financial industry experience including 34 years working at JP Morgan.

The investment approach uses both a top-down and bottom-up research process as well as a combination of fundamental and quantitative inputs to allocate across fixed income sectors. Security selection is based on an evaluation of interest rate risk, credit risk, duration, liquidity, currency risk, ESG risk, legal provisions, and transaction costs.

Commenting on the launch, Fitzgerald said: “Answering the growing client demand for access to an active strategy through the ETF wrapper, JSCP takes our wide-ranging expertise across all major fixed income sectors and provides a disciplined solution to help investors manage risk through various market scenarios.”

Bryon Lake, Head of Americas Client ETF at JP Morgan Asset Management, added: “We’re excited to add JSCP to our line of active strategies, leveraging our strong fixed income pedigree through ETF technology. For investors looking for ways to integrate flexibility into their portfolios, we believe JSCP offers choice and transparency, especially during a period of rising rates.

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