J.P. Morgan Launches New Active Fixed-Income ETF
J.P. Morgan Asset Management is known for its ETFs focusing on passive fixed income, but its newest fund is geared toward active fixed income.
Nov. 4 2021, Published 10:39 a.m. ET
J.P. Morgan is offering a new fund that can offer dividends at low risk. J.P. Morgan Asset Management, an asset management division of JPMorgan Chase, launched the JPMorgan Income ETF (JPIE) on Nov. 2. The fund is managed by the company’s top portfolio managers.
The asset management company currently offers 38 ETFs that have more than $68 billion in assets under management. Those who want to invest in the new JPIE fund can use a secondary investment platform.
What is the JPIE ETF?
The goal of the JPIE ETF is to provide holders with low-risk fixed income based on the interest that accrues from the fund. It also aims to have a higher rate of capital gains by investing in debt securities that share very few similarities. By investing in debts that have little correlation with each other, the ETF will have a more diverse portfolio and maximized capital dividends while having lower volatility and risks.
The ETF will use the dividends collected by debt securities to generate monthly distributions. Some of the ETF's holdings include asset-backed, mortgage-related, U.S. government-related, and inflation-linked securities.
While the fund will focus on investing in U.S.-denominated securities, the company says it may invest in foreign markets as well. Investments in non-dollar securities won’t hold more than 10 percent weight in the fund. However, the fund has stated that it may choose to surpass that limit if it deems it to be the right decision.
J.P. Morgan Asset Management aims to have the ETF last for 10 years or less, though the company says the fund could last longer under certain circumstances, such as significant volatility in interest rates and spreads.
J.P. Morgan says that the JPIE fund isn't tied to a benchmark such as another fund or portfolio. This gives portfolio managers flexibility when investing in assets, allowing them to allocate funds to a different security when one is experiencing high volatility or not performing well.
Who are the portfolio managers of the JPIE ETF?
The JPIE ETF's managers are Andrew Norelli, Andrew Headley, and Thomas Hauser. Norelli, a Princeton grad who’s a former trader for Morgan Stanley, has managed various portfolios throughout the years. He’s a member of J.P. Morgan’s Global Fixed Income, Currency & Commodities team and Asset Allocation Committee. In those groups, Norelli helps develop and research funds that cover fixed income, along with U.S. and international currencies and commodities.
With over 27 years' experience in researching and developing mortgage portfolios, Headley specializes in mortgage-related securities such as commercial mortgage loans, agency and non-agency mortgage-backed securities, and more. Meanwhile, Hauser specializes in mutual funds and has produced high-yield results for the investments he’s managed. He oversees high-yield investments for the JPIE ETF.