J.P. Morgan Debuts Its Fourth ETF
Wall Street titans continue expanding in the exchange-traded funds industry. A day after Goldman Sachs Group Inc (NYSE: GS) introduced its second ETF, J. P. Morgan Asset Management, a unit of JPMorgan Chase & Co. (NYSE: JPM), launched its fourth ETF.
The new ETF from J.P. Morgan Asset Management is the JPMorgan Diversified Return U.S. Equity ETF (NYSE: JPUS).
“The ETF tracks the Russell 1000 Diversified Factor Index, which is rebalanced on a quarterly basis and was thoughtfully constructed based on J.P. Morgan's active insights and risk management expertise. The fund is managed by an experienced J.P Morgan team, with 16-year veteran Dennis Ruhl as the lead portfolio manager. Ruhl's team currently manages $21 billion in assets under management,” according to a statement issued by J.P. Morgan Asset Management.
The Russell 1000 Diversified Factor Index evaluates constituent firms based on attractive relative valuation, quality traits and positive price momentum, according to FTSE Russell, the index's issuer.
No stock accounts for more than 0.73 percent of the index's weight so the top 10 holdings in the JPMorgan Diversified Return U.S. Equity ETF combine for just over six percent of the new ETF's weight. Five of those top 10 holdings are healthcare stocks, while three hail from the utilities sector.
Healthcare and utilities are two of the JPMorgan Diversified Return U.S. Equity ETF's largest sector allocations at weights of 15.5 percent and 12 percent, respectively, but the new ETF's larges sector weight is almost 18 percent to consumer staples. Consumer discretionary, financial services and technology also command double-digit allocations in the new ETF.
“J.P. Morgan's ETF suite employs a unique two step process that strives to produce market returns with lower volatility than market cap-weighted indices. The first step is portfolio construction, where risk is diversified across sectors and securities and the second step is screening securities through a multi-factor process. This helps eliminate expensive, low quality companies with poor momentum that investors can be exposed to in traditional indexes,” said the issuer.
The Other Three
J.P. Morgan's other ETFs are the JPMorgan Diversified Return Global Equity ETF (JPMorgan Exchange-Traded Fund Trust (NYSE: JPGE)), JPMorgan Diversified Return International Equity ETF (NYSE: JPIN) and the JPMorgan Diversified Return Emerging Markets Equity ETF (NYSE: JPEM).
Those ETFs have over $165 million in combined assets under management.
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