J.P. Morgan Asset Management (JPMAM) announced its plans to list its first two European ETFs on the London Stock Exchange, which will be available to investors across European key markets in due course.
The two actively managed liquid alternative strategies, JPM Equity Long-Short UCITS ETF and JPM Managed Futures UCITs ETF, will offer investors exposure to the investment characteristics typical of hedge funds by using alternative beta (which extends the concept of beta investing from long-only traditional strategies to include both long and short investing).
The JPM Equity Long-Short UCITS ETF offers short and long exposures to factors like value, quality, and momentum within developed global equity markets in a liquid and transparent vehicle. Its portfolio will start with a bottom-up analysis, combining short and long positions into individual stocks, and will be built using a systematic, rules-based investment approach.
The JPM Managed Futures UCITS ETF will provide a systematic exposure to carry and momentum factors across four asset classes: equities, fixed income, currency, and commodities. The strategy also starts from a bottom-up analysis; short and long positions will be taken in futures markets across the asset classes already mentioned with the aim to provide uncorrelated returns to the traditional asset classes.
Both strategies have been designed by JPMAM’s Quantitative Beta Strategies team, which focuses on factor-based investing across strategic beta (long-only) and alternative beta (long-short) strategies.
Bryon Lake, International head of ETFs at JPMAM, said: “Providing investors with institutional-quality hedge fund strategies in a cost-efficient, liquid and tradeable ETF wrapper should help to advance the democratisation of hedge fund investing. This first wave of ETF listings is the next step in our commitment to building out our active, strategic beta and alternative beta ETF capabilities, with a view to serving the needs of clients globally. We intend to build on this momentum going into 2018 as we introduce more of JPMAM’s investment capabilities into the ETF vehicle.”
“We continually hear from investors that they’re looking for proven strategies that can provide diversification benefits in their portfolios. Both the managed futures strategy and equity long short strategy have historically had a low correlation to equities and bonds. We believe they’ll serve as useful tools to help investors build better portfolios.”