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JPMAM unveils four fixed income ETFs

TERs between 0.10% and 0.22%

Bryon Lake of JPMAM
Bryon Lake of JPMAM
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J.P. Morgan Asset Management has expanded its ETF range with the launch of four fixed income products on the London Stock Exchange.

The JPM GBP Ultra-Short Income UCITS ETF and the JPM EUR Ultra-Short Income UCITS ETF will offer investors exposure to short maturity bonds across the investment grade and government debt spectrum.

The ETFs will be run by the firm's global liquidity managed reserves team and have total expense ratios (TER) of up to 0.22%, lowered to 0.18% until February 2021.

The two ETFs are euro and sterling versions of the JPMorgan USD Ultra Short Income ETF, which was launched in January, and have return targets of between 0.2% and 0.4% over money market funds.

The final two launches are the JPM BetaBuilders UK Gilts Govt Bond 1-5yr UCITS ETF and the JPM BetaBuilders US Treasury Bond 1-3yr UCITS ETF, which will track the JP Morgan Government Bond Index United Kingdom 1-5 Year and the JP Morgan Government Bond Index United States 1-3 Year, respectively.

The two ETFs will be managed by the firm's quantitative beta strategies arm offering investors exposure to UK gilts and US Treasuries respectively and have TERs of up to 0.1%.

JPMAM's ETF head Lake to harness firm's active strength in major European push

Bryon Lake, head of international ETFs at JPMAM, said: "We are very pleased to be offering clients access to our industry-leading liquidity capabilities through the ETF wrapper.

"We see particular opportunities for growth and adoption of fixed income strategies within ETFs which is why we are heavily investing in this space.

"Following discussions with asset allocators across Europe two trends have come to our attention with respect to how they are seeking to incorporate our ultra-short suite into client portfolios.

"Asset allocators are finding that, firstly, for only a few months more duration they can increase their yield by 45%. In a rising rates environment, employing strategies such as these can help with monitoring and controlling duration."

Neil Hutchison, lead portfolio manager for managed reserves portfolios in Europe at JPMAM, added:  "For clients that don't need the same level of liquidity, ultra-short solutions can provide an incremental return over AAA rated liquidity funds, in a low-risk framework."

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