J.P. Morgan’s first ETF, the JPMorgan Diversified Return Global Equity ETF (NYSEArca: JPGE), debuts today and the new fund will benchmark to a FTSE Group index.
Designed to be a global core equity allocation tool for investors, the JPMorgan Diversified Return Global Equity ETF is comparable to several other new ETFs that have recently debuted in that it uses a factor-driven approach.
“The fund is designed to provide market participation with lower volatility, and starts with the premise that traditional market-cap weighted and single-factor indices expose investors to excessive risk concentrations and a systematic bias toward overvalued securities. Therefore, the fund seeks to reallocate risk by weighting stocks according to four factors: value, size, momentum and low volatility. Research has shown that these factors, when combined, may offer better risk-adjusted returns,” said J.P. Morgan Asset Management in a statement.
The new ETF tracks FTSE Developed Diversified Factor Index, further cementing FTSE status as a rapidly growing provider of indices to North American-listed ETFs. [FTSE’s Growing U.S. Presence]
Including the new JPGE ETF, there are 112 equity and fixed income ETFs tracking a FTSE benchmark available to investors in North America. As of May 31, 2014, there was a combined AUM of $145 Billion in ETF assets benchmarked to FTSE indices in North America, said FTSE in a statement.