Solving the Bond Problem: Active Fixed Income | ETF Trends

Interest rates are low, and stuck there. Inflation is looking less transitory by the week, and labor markets look ready to keep it alive for quite some time. Many investors are sitting on cash and paralyzed by their choices. What’s a prudent advisor to do with their clients’ cash on the sidelines? It’s time to re-evaluate income opportunities.

In the upcoming webcast, Solving the Bond Problem: Active Fixed Income, J.P. Morgan Asset Management’s Benjamin Christensen, managing director and investment specialist of Global Fixed Income Currency & Commodities, and Cary Fitzgerald, managing director and portfolio manager, will lay out their viewpoint: passive fixed income investing alone can’t create the stability, diversification, and return potential that investors expect from their bonds, leaving them vulnerable to the changing investment characteristics of fixed income indexes.

For example, investors may look to a fund like the actively managed JPMorgan Ultra-Short Income ETF (JPST) as a popular way to access the short end of the yield curve.

The ultra-short duration bond strategy leverages the expertise of J.P. Morgan’s Global Liquidity business. Many are looking for a safe way to park their cash and reduce risk exposures, and with something like JPST, investors can utilize an innovative solution to build more robust portfolios.

JPST tries to provide current income while seeking to maintain low volatility of principal by investing in investment-grade, U.S. dollar-denominated short-term fixed, variable, and floating-rate debt. The fund can include corporate securities, asset-backed securities, mortgage-backed and mortgage-related securities, and high-quality money market instruments such as commercial paper and certificates of deposit.

Additionally, the JPMorgan Short Duration Core Plus ETF (JSCP) is an actively managed fixed income ETF designed to deliver total return consistent with the preservation of capital by investing in investment-grade and non-investment grade short-term fixed income securities.

JSCP employs a multi-sector approach to create a diversified portfolio while managing risk. Seeking to maintain a duration of three years or less, the fund offers the flexibility to allocate assets to below-investment grade securities and international debt to seek additional yield.

Financial advisors who are interested in learning more about this active fixed income strategy can register for the Wednesday, October 27 webcast here.