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JPMorgan Buys Stake In Global X

Cinthia Murphy
J.P. Morgan Asset Management has made a minority investment in Global X Funds, establishing a partnership between the two firms aimed at benefiting both their plans to expand presence in the ETF space.

J.P. Morgan Asset Management has made a minority investment in Global X Funds, establishing a partnership between the two firms aimed at benefiting both their plans to expand presence in the ETF space.

Terms of the deal were not disclosed. Both firms told ETF.com that the partnership will not result in any changes to their individual businesses, to distribution channels or to marketing plans at this point. No ETF will be rebranded, no portfolio will be tinkered with in any way, they say.

“But in the long term, we see a lot of potential,” said Bob Deutsch, JP Morgan’s head of global ETFs.

J.P. Morgan is coming on two years since it launched its first ETF in June 2014, the JPMorgan Diversified Return Global Equity (JPGE | D-72), and it has since expanded its family of Diversified Return ETFs to seven funds.

The ETFs command today about $350 million in assets under management, and there are plans to have that roster grow to about 12 funds by year-end.

Global X ETFs Have $3 Billion In Assets

Global X, meanwhile, has a track record of innovation—a firm that has grown from a small niche international-type access provider to a $3 billion issuer with a diverse offering.

The firm’s biggest fund, the Global X SuperDividend (SDIV | B-52), leads, with $750 million in assets. And through it all, the company has been privately employee-owned and -funded.

“This partnership really provides the best of both worlds to Global X clients—the support of a world-class partner, and the fact that Global X maintains its independent, nimble approach to build its business,” Bruno del Ama, co-founder and CEO of Global X, told ETF.com.

Follows IndexIQ & VelocityShares Deals

The deal is the latest in a growing number of partnerships and acquisitions taking place in the ETF space.

Back in 2014, there were two such acquisitions; the first, when Janus Capital Group bought ETN/ETF provider VelocityShares in October 2014—a small firm known for its expertise on products designed around volatility.

A few months later, New York Life, the biggest U.S. mutually structured insurance company, agreed to acquire the ETF firm IndexIQ, marking its first foray into the ETF world.

Clearly, the J.P. Morgan/Global X deal is different because it’s not an acquisition. It simply entails a minority, passive investment amounting to a partnership. Still, it points to firms’ growing efforts to expand their reach more aggressively, and to meet advisor and investor needs for product development and for education as the ETF industry grows globally.

At the end of the first quarter, global ETF assets hit $3 trillion. U.S.-listed assets totaled more than $2.18 trillion.

Contact Cinthia Murphy at cmurphy@etf.com.

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