Expanding on its municipal bond exchange traded fund line, J.P. Morgan Asset Management launched an actively managed intermediate muni bond strategy to help investors better control their fixed-income duration exposure.
On Wednesday, J.P. Morgan Asset Management rolled out the JPMorgan Municipal ETF (Cboe: JMUB), which has a 0.25% expense ratio.
The active muni ETF will be managed by J.P. Morgan’s Michelle V. Hallam, Executive Director; Kevin M. Ellis, Managing Director; and Michael R. Myers, Executive Director.
The JPMorgan Municipal ETF will try to provide provide monthly dividends and invest primarily in municipal obligations, according to the fund’s prospectus.
The portfolio’s underlying holdings mainly consist of municipal securities that include variable rate demand obligations, variable rate demand preferred securities, short-term municipal notes, tax exempt commercial paper, private activity and industrial development bonds, tax anticipation notes, bond anticipation notes, revenue anticipation notes or other short term notes, private placements and participation in pools of municipal securities.
While the majority of the underlying benchmark holds investment-grade muni debt, up to 10% of the fund may be tactically allocated toward below investment-grade debt securities should opportunities emerge.
According to J.P. Morgan, JMUB emphasizes comprehensive risk/reward analysis to identify investments that may perform well over market cycles, and it seeks to maintain an average weighted maturity between three and ten years under most market conditions.
“Historically, intermediate-term bonds tend to offer diversification and counterbalance when equities decline,” Richard Taormina, head of the tax aware strategies team at J.P. Morgan Asset Management, said in a note. “JMUB is a great option for investors looking for a steady income stream and can potentially offer less downside risk in a volatile market environment.”
JMUB expands on J.P. Morgan’s fixed-income ETF suite, which recently saw the addition of the actively managed JPMorgan Ultra-Short Municipal ETF (Cboe: JMST).
For more information on new fund products, visit our new ETFs category.