Nevertheless, Deutsch stated that J.P. Morgan’s long-term focus will be in active ETFs. He also singles out the fixed income market as “fairly wide open” since portfolio transparency is less of an issue there. [Actively Managed ETF Nears Turning Point]
“While nascent today, we think active ETFs will grow,” Deutsch said last year. “A couple of years ago, there were questions on a lot of people’s minds about active ETFs because it was an idea, and now there are a number of active ETFs in the marketplace and it is more than an idea.”
J.P. Morgan currently offers the JPMorgan Alerian MLP Index ETN (NYSEArca: AMJ). The ETN is an unsecured debt instrument that replicates the return of the MLP index. Unlike ETFs, ETNs are subject to credit risk of the underwriting bank or issuer.
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Max Chen contributed to this article.