JPMorgan Readying to Enter ETF Fray

ETF Trends

JPMorgan is the latest financial services giant to turn exchange traded fund purveyor as the company prepares to launch two passive, so-called smart-beta ETFs.

According to two Securities and Exchange Commission filings, JPMorgan is finalizing the JPMorgan Diversified Return Global Equity ETF (NYSEArca:JPGE) and the JPMorgan Diversified Return International Ex-North America Equity ETF (NYSEArca:JPIN) .

The Diversified Return Global Equity ETF will try to reflect the performance of the FTSE Developed Diversified Factor Index, which will hold equity securities from developed global markets selected on a diversified set of factor characteristics. JPIN has a 0.38% expense ratio.

The Diversified Return International Ex-North America Equity ETF will try to reflect the performance of the FTSE Developed ex North America Diversified Factor Index, which include large- and mid-cap equity stocks from developed markets outside North America, or the U.S. and Canada. JPIN has a 0.43% expense ratio.

Both ETFs follow a rules-based, multi-factor indexing methodology that picks out stocks based on characteristics like relative valuation, price momentum, low volatility, and specific market capitalization. In contrast, traditional beta-index ETFs weight component holdings based on market-capitalization where the largest stocks by assets have the biggest weight in the index. [JPMorgan Eyes ‘Smart-Beta’ Developed Global ETF]

Most investors may also know JPMorgan for its exchange traded note offering. The JPMorgan Alerian MLP Index ETN (AMJ) is the largest ETN on the market with $6.4 billion in assets under management. However, ETNs are not ETFs since the notes are a type of debt security that is exposed to the credit worthiness of the underwriting bank. [ETNs Target Sophisticated Investors]

For more information on new fund products, visit our new ETFs category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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