JPMorgan Expands Bond ETF Lineup

JPMorgan Chase & Co.'s JPM JPMorgan Asset Management (JPAM) added to its burgeoning lineup of fixed income exchange traded funds Wednesday with an actively managed core bond fund.

The JPMorgan Core Plus Bond ETF JCPB is the ninth fixed income ETF in the JPAM stable.

What Happened

“The Fund seeks a high level of current income by investing primarily in a diversified portfolio of high-, medium- and low-grade debt securities,” according to a statement. “The strategy combines bottom-up security selection with top-down analysis to improve potential for attractive risk-adjusted returns and increased income.”

JCPB's management team, which has over 80 years combined experience, is the same management team that runs the JPMorgan Core Bond Mutual Fund (WOBDX). That fund has nearly $29 billion in assets under management.

Why It's Important

The new JCPB will primarily invest in investment-grade bonds, but the managers have the flexibility to have a high-yield allocation of up to 35 percent. JCPB debuted with just over $25 million in assets and has 353 holdings, according to issuer data.

Duration and maturity data are not yet available for JCPB, but if the fund takes a similar approach to WOBDX, it could be an intermediate-term fund with an average duration around 5.65 years and an average maturity of 7.50 years.

“Relative to passively-managed ETFs, JCPB offers a more flexible approach to a core fixed income allocation with the potential to achieve increased yield and enhanced risk-adjusted returns,” said Jillian DelSignore, U.S. head of ETF distribution at JPAM, in the statement.

What's Next

While JCPB's asset-gathering acumen remains to be seen, the new ETF has an important advantage on its side: a favorable fee. The new fund charges 0.40 percent per year, or $40 on a $10,000 investment. That is far cheaper than some established, rival funds. For example, the Pimco Total Bond ETF BOND charges 0.76 percent per year.

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