JPMorgan is the latest financial services giant to turn exchange traded fund purveyor as the company prepares to launch two passive, so-called smart-beta ETFs.
According to two Securities and Exchange Commission filings, JPMorgan is finalizing the JPMorgan Diversified Return Global Equity ETF (NYSEArca: JPGE) and the JPMorgan Diversified Return International Ex-North America Equity ETF (NYSEArca: JPIN).
The Diversified Return Global Equity ETF will try to reflect the performance of the FTSE Developed Diversified Factor Index, which will hold equity securities from developed global markets selected on a diversified set of factor characteristics. JPIN has a 0.38% expense ratio.
The Diversified Return International Ex-North America Equity ETF will try to reflect the performance of the FTSE Developed ex North America Diversified Factor Index, which include large- and mid-cap equity stocks from developed markets outside North America, or the U.S. and Canada. JPIN has a 0.43% expense ratio.
Both ETFs follow a rules-based, multi-factor indexing methodology that picks out stocks based on characteristics like relative valuation, price momentum, low volatility, and specific market capitalization. In contrast, traditional beta-index ETFs weight component holdings based on market-capitalization where the largest stocks by assets have the biggest weight in the index. [JPMorgan Eyes ‘Smart-Beta’ Developed Global ETF]
Most investors may also know JPMorgan for its exchange traded note offering. The JPMorgan Alerian MLP Index ETN (NYSEArca: AMJ) is the largest ETN on the market with $6.4 billion in assets under management. However, ETNs are not ETFs since the notes are a type of debt security that is exposed to the credit worthiness of the underwriting bank. [ETNs Target Sophisticated Investors]
For more information on new fund products, visit our new ETFs category.
Max Chen contributed to this article.