A Shifting Mindset for Fixed-Income ETF Investors

As the market environment shifts, fixed-income ETF investors will have to take a hard look at their portfolios and consider ways to grapple with the challenges ahead.

“Advisors are looking for a way to shorten up duration, and so one of the most successful conversations we’ve had this year is around JPST – our ultra-short duration fixed-income ETF. There’s really almost a dual use case: somebody trying to pull in and shorten duration in a portfolio or take that one step out from cash to earn a little bit more than what they had been holding as cash on a portfolio,” Jill DelSignore, Executive Director and Head of ETF Distribution at J.P. Morgan, said at the Charles Schwab IMPACT 2018 conference.

In a rising interest rate environment, investors are increasingly looking for a safe haven to park their cash and mitigate risk. The JPMorgan Ultra-Short Income ETF (BATS: JPST) can help investors shorten their duration exposure and provide an alternative for money market exposure. The bond ETF 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.

JPST shows a 2.63 percent 30-day SEC yield and comes with a 0.18% net expense ratio.