While rates continue to rise from historic lows, core bond duration remain near record highs.
On the upcoming webcast, Analyzing Short-Duration Strategies for Rising Rates, Samantha Azzarello, Vice President, Global Market Strategist, J.P. Morgan Asset Management; Alexander Nobile, Vice President, Investment Specialist, J.P. Morgan Asset Management; and Ryan Szakacs, Vice President, ETF Capital Markets, J.P. Morgan Asset Management, will discuss market views and lower duration strategies amid today’s rising rates.
Specifically, the actively managed JPMorgan Ultra-Short Income ETF (JPST) leverages the expertise of J.P. Morgan’s Global Liquidity business. In a rising interest rate environment, investors 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 stronger portfolios. The ETF shows a 2.82% 30-day SEC yield.
JPST will try to provide current income while seeking to maintain a low volatility of principal by investing in investment-grade, U.S.-dollar-denominated short-term fixed, variable and floating rate debt.
Additionally, the fund may 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.
The active ETF may also invest in U.S. Treasury securities, including Separate Trading of Registered Interest and Principal of Securities (STRIPS), securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, securities issued or guaranteed by foreign governments, repurchase agreements, when-issued securities, delayed delivery securities, forward commitments, zero-coupon securities and privately placed securities, according to a prospectus sheet.
The ETF will normally focus investments in the banking industry or hold more than 25% of assets in securities issued by companies in the banking industry. The fund, though, may also invest less than 25% of assets in this industry as a temporary defensive measure.
The bond ETF’s will seek to maintain a duration of one year or less, but it may be exposed to duration longer than one year under certain market conditions such as periods of significant volatility in interest rates and spreads.
Financial advisors who are interested in learning more about the fixed-income markets can register for the Thursday, November 29 webcast here.