Does JPMorgan's Foray Into ETFs Mean Anything?

Last week, JPMorgan Chase (NYSE: JPM), the Dow component and the second-largest U.S. bank, announced it was getting into the ETF game. The bank already issues the JPMorgan Alerian MLP Index ETN (NYSE: AMJ), a unique ETN that is the only exchange traded product offering investors exposure to master limited partnerships.

While JPMorgan is a banking giant, successful on myriad fronts, success in other areas doesn't necessarily portend success in the ETF arena.

I offer the comparison of ETFs vs. the beer industry. There is room for three big players: Bud, Miller and Coors, or in the case of ETFs, SPDRs, issued by State Street (NYSE: STT), iShares and Vanguard. There are some successful "micro brews" like Market Vectors, WisdomTree, Claymore and a few others, but when you get down to it, there really isn't a need for more ETF issuers.

That said, that won't stop JPMorgan from getting into the business and it hasn't stopped the likes of PIMCO or Charles Schwab (NYSE: SCHW) from launching new ETFs and Goldman Sachs (NYSE: GS), Legg Mason (NYSE: LM) and T. Rowe Price (Nasdaq: TROW) from declaring their intent to play in the actively managed ETF space.

While every business has room for new competition, when it comes to ETFs, it's not a matter of room, it's an issue of do new entrants bring anything of value to the table. In the case of JPMorgan, will they make enough noise in the ETF arena to make it worth their shareholders' time? Only time will tell.