Banking giant JPMorgan Chase (JPM) will debut its first exchange traded fund Tuesday when the JPMorgan Diversified Return Global Equity ETF lists on the New York Stock Exchange under the ticker “JPGE.”
The June 17 launch date was confirmed in a statement from NYSE Arca.
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. The new ETF carries an expense ratio of 0.38%. [JPMorgan Prepares ETF Entry]
JPMorgan’s new ETF enters a growing field of ETFs that 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 Readies Smart Beta Global ETF]
Just this month, State Street’s (STT) State Street Global Advisors unit, the second-largest U.S. ETF issuer, has introduced nine various factor-driven ETFs, including six single-country funds. [State Street Takes Quality Approach to ETFs]
In a survey of financial advisors conducted by ETF Trends and RIA Database, respondents revealed that there was some interest in the advanced beta strategies, but the majority “still need to do more research.”
Data confirm the rising popularity of smart beta or intelligent index ETFs. There were 335 such ETFs with nearly $300 billion in combined assets under management at the end of 2013.
Smart beta ETFs accounted for over $65 billion of total ETF inflows in 2013.
ETF Trends editorial team contributed to this article.
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