J.P. Morgan Asset Management rounded out its fixed-income ETF line up with an actively managed bond strategy to deliver core exposure that taps into some of the best ideas out of J.P. Morgan’s fixed-income platform.
The recently launched JPMorgan Core Plus Bond ETF (JCPB) has a 0.40% net expense ratio. The new active ETF will be managed by J.P. Morgan’s Steven Lear, Richard Figuly and J. Andrew Norelli.
The JPMorgan Core Plus Bond ETF tries to generate a high level of income by investing in high-, medium- and low-grade debt securities, according to the fund’s prospectus.
The ETF will include exposure to corporate bonds, U.S. treasury obligations and other U.S. government and agency securities and asset-backed, mortgage-related and mortgage-backed securities. JPCB may invest in debt securities rated below investment grade (i.e., high yield or junk bonds) or the unrated equivalent, including from foreign and emerging markets.
Under normal conditions, the ETF will hold 65% of its portfolio in investment grade securities, and will not hold more than 35% of assets in below investment grade or speculative grade securities. Furthermore, up to 35% of the fund’s portfolio may be invested in foreign securities, including securities denominated in foreign currencies.
The investment managers will combine a bottom-up security selection with top-down analysis to improve potential for attractive risk-adjusted returns and increased income.
“JPMorgan is bringing choice to the fixed income market, delivering many of our best active ideas to areas where investors have previously had limited options,” Jillian DelSignore, U.S. head of ETF distribution at J.P. Morgan Asset Management, said in a note. “Relative to passively-managed ETFs, JCPB offers a more flexible approach to a core fixed income allocation with the potential to achieve increased yield and enhanced risk-adjusted returns.”
For more information on new fund products, visit our new ETFs category.