The ETF will implement the momentum return factor by looking at the relative value of prices of commodities and developed market currencies over time and looking across developed market fixed income, developed
market equity indices and international (including emerging market) commodities. It will utilize futures contracts to exploit price momentum trends across the asset classes.
The ETF implements the carry trade strategies through derivatives instead of holding long and shorting securities physically through fixed income securities to benefit from differences in the yields of interest rates caused by uncertainty in interest rates, currency to benefit from differences in the relative yields of various currencies and commodities to benefit from differences in the price of commodities futures contracts trading below the expected market price at contract maturity and those trading above the expected market price at contract
maturity.
“Investors are increasingly looking to venture beyond traditional asset classes to diversify their portfolios and enhance risk-adjusted returns,” Joanna Gallegos, U.S. Head of ETFs for J.P. Morgan Asset Management, said in a note. “We are thrilled to bring to market the benefits of a managed futures strategy in an ETF wrapper and believe it will help our clients solve for specific needs and build stronger portfolios.”
For more information on new fund products, visit our new ETFs category.