Last updated: 13:42 / Tuesday, 17 June 2014
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JP Morgan AM Launches its First ETF, a Smart-Beta Fund

JP Morgan AM Launches its First ETF, a Smart-Beta Fund
  • Strategy emphasizes low volatility and return potential through the use of four factors
  • JPMorgan Diversified Return Global Equity ETF

J.P. Morgan Asset Management has announced that its first ETF, JPMorgan Diversified Return Global Equity (JPGE), officially launched for trading today. The fund represents the next generation of strategic beta ETFs, seeking to provide global equity returns from four distinct return factors and reduced volatility by diversifying risks across regions and sectors.  It is designed to be a core global equity allocation.

JPMorgan Diversified Return Global Equity is a strategic beta, developed market equity ETF that tracks an index co-developed with FTSE Group – the FTSE Developed Diversified Factor Index.

The fund is designed to provide market participation with lower volatility, and starts with the premise that traditional market-cap weighted and single-factor indices expose investors to excessive risk concentrations and a systematic bias toward overvalued securities. Therefore, the fund seeks to reallocate risk by weighting stocks according to four factors:  value, size, momentum and low volatility.  Research has shown that these factors, when combined, may offer better risk-adjusted returns. 

The fund is managed by an experienced J.P. Morgan team, with 18-year veteran Beltran Lastra as the lead portfolio manager.  Lastra's team currently manages $12 billion in AUM globally (as of April 30, 2014).

"We believe that J.P. Morgan has unique investment insights and global capabilities that will be attractive to ETF investors, and this product is an important first step in delivering those capabilities," said Robert Deutsch, head of the ETF business for J.P. Morgan Asset Management.  "J.P. Morgan has grown to one of the largest global mutual fund managers and our ETF offering will be a natural extension our product line-up."

"We believe that the custom index co-developed with FTSE sets this fund apart and reflects a next-generation-style ETF that will be attractive to U.S. investors," Deutsch said. 

"We are delighted that J.P. Morgan has chosen FTSE as the index provider for launching their new ETF business in the United States," said Jonathan Horton, president of FTSE North America. "Electing to work with FTSE to co-develop the methodology behind this ground-breaking multi-factor index series is a great example of combining J.P. Morgan's research and investment process know-how with our index expertise creating customized solutions in partnership with clients."