JP Morgan Asset Management Poised To Launch Two European ETFs

Robbie Lawther

12 October 2017

(JPMAM) is set to launch its first two European exchange-traded funds. Both ETFs will also be made available to investors across key markets in Europe.

The two actively-managed liquid alternative strategies, JPM Equity Long-Short UCITS ETF and JPM Managed Futures UCITS ETF, will be listed on the London Stock Exchange shortly, the firm said in a statement. JPMAM did not state when the funds will be listed on the LSE.

Both ETFs will offer investors exposure to the investment characteristics typical of hedge funds by using alternative beta which extends the concept of beta investing from long-only traditional strategies to include both long and short investing.

The JPM Equity Long-Short UCITS ETF will seek to provide long-short exposure to factors like value, quality, and momentum within developed global equity markets. The portfolio will be constructed using bottom-up analysis by taking long and short positions in individual equity securities and will be built using a systematic, rules-based investment approach.

The JPM Managed Futures UCITS ETF will seek to provide systematic exposure to carry and momentum factors across four asset classes: equities, fixed income, currency, and commodities. The strategy will also be constructed bottom-up by taking long and short positions in futures markets across these asset classes with the goal of providing returns that are uncorrelated to traditional asset classes.

The strategies were designed by JPMAM’s quantitative beta strategies team, which is a team of quantitative research analysts and portfolio managers focused on factor-based investing across strategic beta (long-only) and alternative beta (long-short) strategies.

“Providing investors with institutional-quality hedge fund strategies in a cost-efficient, liquid and tradeable ETF wrapper should help to advance the democratisation of hedge fund investing,” said Bryon Lake, international head of ETFs. “This first wave of ETF listings is the next step in our commitment to building out our active, strategic beta and alternative beta ETF capabilities, with a view to serving the needs of clients globally. We intend to build on this momentum going into 2018 as we introduce more of JPMAM’s investment capabilities into the ETF vehicle.”

Lake added: “We continually hear from investors that they’re looking for proven strategies that can provide diversification benefits in their portfolios. Both the managed futures strategy and equity long short strategy have historically had a low correlation to equities and bonds. We believe they’ll serve as useful tools to help investors build better portfolios."