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J.P. Morgan Aims For Equity Upside, Less Volatility With New ETF


J.P. Morgan Asset Management jumped into the exchange traded fund industry with smart-beta global offerings, and now, the money manager is starting to fill out its domestic exposure with a new broad U.S. equity ETF.

According to a press release, the JPMorgan Diversified Return US Equity ETF (JPUS) began trading Wednesday. The new ETF has a net expense ratio of 0.29%.

JPUS tries to reflect the performance of the Russell 1000 Diversified Factor Index, which is comprised of U.S. stocks taken from the Russell 1000 index and selects components based on a diversified set of factor characteristics, such as relative valuation, price momentum and quality. Additionally, securities are diversified across industries. The underlying index may also utilize up to 20% of its assets in exchange traded futures to better track the underlying index.

Through its multi-factor indexing methodology, JPUS could provide better risk-adjusted returns than the broader large-cap benchmark. Specifically, its its enhanced indexing process would allow the ETF to exclude expensive, low quality companies with poor momentum.

“Investors have been able to participate in the upside of a market recovery over the past several years, but they are still concerned about continued market volatility,” Robert Deutsch, Global Head of ETFs for J.P. Morgan Asset Management, said in the press release. “JPUS provides a solution for US equities that helps keep clients invested across market cycles by attempting to capture most of the upside with a goal of providing less volatility in down markets.”

J.P. Morgan Asset Management has already launched three international smart-beta ETF investments, including the JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) , JPMorgan Diversified Return Global Equity ETF (JPGE) and JPMorgan Diversified Return International Equity ETF (JPIN) . [J.P. Morgan’s New EM ETF Challenges Conventional Rivals]

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.