J.P. Morgan AM expands its range of active ETFs with a first ETF for high yield bonds

J.P. Morgan Asset Management (J.P. Morgan AM) today launched its 10th active fixed income ETF, demonstrating further innovation: the JPM USD High Yield Bond Active UCITS ETF (ticker: JPHY) is the firm’s first active strategy focused on high yield bonds.

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Travis Spence, Head of ETF Distribution in EMEA J.P. Morgan Asset Management

    JPM USD High Yield Bond Active UCITS ETF (ticker JPHY): J.P. Morgan Asset Management’s 10th actively managed bond ETF joins its range of aggregate bond, corporate bond, ultra-short income and sustainable fixed income ETFs

    Latest ‘ETF Insights’ whitepaper confirms the growing relevance of active ETFs in the bond market

    With more than USD 46 billion in assets under management in active fixed income ETFs, J.P. Morgan Asset Management is the world’s leading provider of active fixed income ETFs.

 JPHY is now tradable on Deutsche Börse Xetra, the London Stock Exchange, the Borsa Italiana and the SIX Swiss Exchange.

As J.P. Morgan Asset Management analyses in a recently published white paper, the global market for bond ETFs is growing steadily. By 2030, the market volume could increase from USD 2.5 trillion today to USD 6 trillion. The market for active fixed-income ETFs is expected to grow to USD 1.7 trillion. In view of the current cycle of interest rate cuts by the Federal Reserve (Fed), the experts see a favourable environment for further growth. In the complex bond ETF market, active ETFs offer particularly good opportunities to utilise inefficiencies and navigate within this market dynamic.

Proven platform, processes and professionals

An active management approach makes particular sense in the high-yield market, as the asymmetric yield profiles of bonds require in-depth expertise in selection and risk management. The JPM USD High Yield Bond Active UCITS ETF (JPHY), for example, makes it possible to utilise the flexibility and liquidity advantages of the ETF structure on the basis of J.P. Morgan Asset Management’s proven platform for US high yield bonds, which is already used to manage more than USD 55 billion.

JPHY, which targets interest income and capital growth, will utilise the proven long-term high-yield investment process to identify mispriced bonds and flexibly adjust the allocation to market cycles. The investment team of experienced credit analysts and portfolio managers such as Robert Cook, Thomas Hauser, Jeffrey Lovell, John Lux and Edward Gibbons will also actively manage the risks. The aim is to achieve above-average returns in all market environments and to outperform the ICE BofA US High Yield Constrained Index, which comprises US dollar high-yield bonds from various industrialised countries, over the long term.

‘We are very committed to providing investors with innovative investment solutions in the active bond segment,’ emphasises Travis Spence, Global Head of ETFs at J.P. Morgan Asset Management. ‘Especially in times of increased market volatility, active ETFs such as JPHY, our new active ETF for high yield bonds, provide improved liquidity and transparency. The added value of corporate bond research expertise and active management skills create a compelling alternative to passive approaches, especially when it comes to preparing portfolios for challenging markets.’

Travis Spence also explains that active management has proven itself very well in the bond sector and offers numerous advantages, such as overcoming diversification challenges. ‘As many segments of the bond market are not represented in standard indices, it can be difficult to replicate benchmarks. Active management, on the other hand, can be used to make targeted investments in different sectors, exploit market inefficiencies and thus generate additional returns. Against this backdrop, active bond ETFs can be an important driver for the entire ETF industry. We aim to provide easy and flexible access to active portfolio building blocks across the fixed income spectrum,’ Mr Spence continued.

JPHY is classified as ‘Article 8’ under SFDR and has a total expense ratio of 45 basis points.

JPMorgan ETFs (Ireland) ICAV – USD High Yield Bond Active UCITS ETF

The objective of the Sub-Fund is to achieve a long-term return in excess of the Benchmark by actively investing primarily in a portfolio of USD-denominated below investment grade corporate debt securities.

JPMorgan ETFs (Ireland) ICAV – USD High Yield Bond Active UCITS ETF

The objective of the Sub-Fund is to achieve a long-term return in excess of the Benchmark by actively investing primarily in a portfolio of USD-denominated below investment grade corporate debt securities.

Source: ETFWorld.co.uk