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JPMorgan is expanding its ETF portfolio with a new type of active fund, handing over the reins to one of its highly regarded mutual fund managers in hopes of building on its recent success in the ETF industry. On Wednesday, the bank is launching the JPMorgan Active Small Cap Value (JPSV) ETF with the aim of outperforming the Russell 2000 Small Cap Index. The fund will be led by portfolio manager Lawrence Playford, who has extensive experience in mutual funds. Playford jointly manages two other mutual funds, the JPMorgan Small Cap Blend Fund and the JPMorgan Mid Cap Value Fund, both of which are rated four-star silver by Morningstar. For example, in 2022, Playford’s small-cap fund was in the top quartile of small-cap growth funds, according to Morningstar. The new JPSV fund, with an expense ratio of 0.74%, will operate as a semi-transparent ETF. This means that instead of publishing its exact holdings every day, the fund will instead publish a proxy portfolio that shows investors most of what the fund owns, but not in exact weight and possibly omitting new additions or subtractions. The model is supposed to be a hybrid between an ETF and a mutual fund, giving managers some privacy to make changes while still giving market makers enough information to help lower trading costs. “Small cap active value can be a compelling addition to investor portfolios. … JPSV is our first ETF to launch with the NYSE Active Proxy model, and we are confident that this structure and portfolio will meet the needs of investors,” Brion Lake, Head of US ETFs. at JP Morgan Asset Management, the statement said. Translucent ETFs first got the green light from the Securities and Exchange Commission in 2019, with some modest progress. For example, the Nuveen Growth Opportunities (NUGO) ETF manages about $2 billion in assets and is doing better in 2023. The JPMorgan ETF business has been a big winner in recent months in terms of asset collection. The BetaBuilders Europe ETF (BBEU) and Equity Premium Income ETF (JEPI) are the two largest ETFs by inflow this year, according to FactSet, with combined revenues of over $10 billion, according to FactSet.
Credit: www.cnbc.com /
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