JP Morgan Asset Management has listed four fixed income index-tracking funds on various exchanges as part of its relatively recent entry into the European exchange-traded fund (ETF) market.
All the funds are listed in London and two are also listed in Germany and Italy, with plans for Swiss listings.
Two funds are “ultra short income” products that target short maturity bonds and are denominated in sterling and euro. The two others invest in UK gilts or US treasuries.
The JPM GBP Ultra-Short Income Ucits ETF and the JPM EUR Ultra-Short Income Ucits ETF will invest in very short maturity bonds and debt instruments across investment-grade corporate bonds and government debt.
Ultra-short income funds are for clients prepared for a lower level of liquidity but who would expect an incremental return over AAA-rated liquidity funds.
The firm says asset allocators across Europe had found that with the wider ultra-short suite – which includes a US dollar product - they could increase their yield by 45% for only a few months more duration and they could also capture 82% of the US Aggregate Bond Index yield with only 8% of the duration.
The ultra-short income ETFs will have a return target of 0.20-0.40% net of fees over money market funds and a total expense ratio of up to 22 basis points, waived to 18 basis points until February 28, 2021.
The other two funds are the JPM BetaBuilders UK Gilts 1-5yr Ucits ETF and the JPM BetaBuilders US Treasury Bond 1-3yr Ucits ETF.
The BetaBuilder range of products are designed to be “building block’ ETFs” that offer precise exposure to strategically important areas of the market.
The euro ultra short income and the BetaBuilders US treasury ETFs have been listed on the Deutsche Boerse Xetra and Borsa Italiana and will list on the SIX Swiss Exchange on July 10.
Bryon Lake, head of international ETFs at JPMAM, said: “We see particular opportunities for growth and adoption of fixed income strategies within ETFs which is why we’re heavily investing in this space.”
JP Morgan AM was joined in the European ETF market last week by rival Goldman Sachs Asset Management.
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