J.P. Morgan is building out its fixed-income exchange traded fund lineup with the addition of a new U.S. dollar-denominated emerging market sovereign debt strategy for those looking for attractive yield opportunities in the global market.
On Tuesday, J.P. Morgan launched the JPMorgan USD Emerging Markets Sovereign Bond ETF (NYSEArcaL: JPMB), which has a 0.39% expense ratio.
The JPMorgan USD Emerging Markets Sovereign Bond ETF tries to reflect the performance of the JPMorgan Emerging Markets Risk-Aware Bond Index, which is comprised of U.S. dollar-denominated sovereign and quasi-sovereign fixed and floating rate debt securities from emerging market issuers selected by a rules-based methodology, according to a prospectus sheet.
The underlying index starts out by selecting securities taken from the J.P. Morgan Emerging Market Bond Index Global Diversified and applies a proprietary methodology to filter for liquidity, for country risk and allocates risk based on credit rating.
“By using an alternative weighting approach, the index seeks to provide better risk-adjusted returns vs. market cap weighted indexes and potentially generate a competitive yield and lower levels of duration for clients,” according to J.P. Morgan.