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JP Morgan launches its first European bond ETFs

JP Morgan Asset Management (JPMAM) has launched three fixed income exchange traded funds – the group’s first bond ETFs in Europe.

JP Morgan launches its first European bond ETFs


Adam Lewis

The JP Morgan USD Emerging Markets Sovereign Bond Ucits ETF (JPMB), JP Morgan USD Ultra Short Income ETF (JPST) and JP Morgan BetaBuilders Eur Govt Bond 1-3yr Ucits ETF (JE13) will all list on the London Stock Exchange (LSE) on 22 February, with European listings to follow in due course.

Managed by Niels Schuehle and Eric Isenberg, the JPMB will track the JP Morgan’s Emerging Market Risk-Aware Bond Index and provide exposure to US dollar-denominated sovereign debt across the emerging markets. It carries a total expense ratio of 39 basis points (bps).

Meanwhile, the JPST  ETF will seek to provide diversified exposure to very short maturity bonds and debt instruments across investment grade corporate bonds and government debt. Seeking to target portfolio duration of less than one year, it will be managed by a five-strong investment team, led by David Martucci, global head of the JP Morgan global liquidity managed reserves and portfolio manager.

JPST has a return target of 0.4-0.6% over money market funds and will carry a TER of up to 22bps, which will be discounted to 18bps until 28 February 2021.

Of the three ETFs, the JE13 carries the lowest TER, coming in at 10bps. It aims to track the JP Morgan EMU Government Bond 1-3 Year Index and has been designed for investors concerned about an environment of rising interest rates.

“We’re focused on launching products which will serve specific needs,” said Bryon Lake, international head of ETFs at JPMAM.

“Sophisticated investors, across Europe, are saying they want to see innovation in the fixed income arena whether that be our beta builder, smart beta and/or active capabilities.

“Fixed income ETFs continue to be amongst the fastest growing areas of the ETF industry, a momentum which we expect to continue as these products mature and evolve. Fixed income ETFs offer lower-cost, convenience, transparency and intra-day access and can be used to help build more robust portfolios and solve for a variety of investment needs.”

The launch comes as part of a considerable push into the European ETF market by the asset manager. In November last year, it unveiled its first European ETFs – the JP Morgan Managed Futures Ucits ETF (JPMF) and JP Morgan Equity Long-Short Ucits ETF (JELS) – on the London Stock Exchange.