JPMorgan has announced the launch of a new series of four exchange traded-funds based on the sub-indices of JPMorgan’s European Monetary Union Government Bond Index on NextTrack, the Euron
JPMorgan has announced the launch of a new series of four exchange traded-funds based on the sub-indices of JPMorgan’s European Monetary Union Government Bond Index on NextTrack, the Euronext Paris segment dedicated to ETFs.
The new ETF series is designed to provide investors with direct access to the performance of European fixed income bonds with specific maturities and follows the listing of the JPMorgan ETF GBI EMU Fund last October.
‘This new series of ETFs has been developed in response to a clear demand from clients for investment tools that give exposure to bonds with specific maturities,’ says Thierry Marcolivio, head of structured funds for JPMorgan in France.
‘Investors can now access the performance of the leading European government bond indices in a simple and effective way, tailoring their choices according to specific investment strategies.’
JPMorgan ETF GBI EMU 1-3 years is based on the JPMorgan EMU Government Bond Index 1-3 years and provides investors with exposure to a basket of 50 European government bonds with a maturity of between one and three years.
Similarly, the JPMorgan ETF GBI EMU 3-5 years, JPMorgan ETF GBI EMU 5-7 years and JPMorgan ETF GBI EMU 7-10 years are based on the respective JPMorgan EMU Government Bond indices for those durations and provide exposure to baskets of 44, 32 and 42 European government bonds respectively.
‘We are delighted to welcome this new JPMorgan initiative that allows us to enlarge our offer of ETFs based on bond indices,’ says Pedro Fernandes, a senior manager and head of ETFs for the European cash market at NYSE Euronext.
‘We now have 308 ETFs listed on NextTrack, including 80 registered since the beginning of this year. ETFs are attractive investment products for all types of investors, [being] flexible, transparent and more cost-efficient than traditional funds.’
Launched in 1998, the JPMorgan EMU GBI Index includes regularly-traded fixed-rate domestic government bonds issued by countries that use the euro as their official currency including Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain.
Countries are weighted by market capitalisation and total returns for each market are calculated, providing a relative measure of their performance. The index and its sub-indices are rebalanced monthly to satisfy the composition rules for the underlying instruments. As of April, the JPMorgan EMU GBI Index market value was estimated at EUR3.08trn, with an average yield of 4.08 per cent and an average Macaulay duration of 6.41 years.
The four new JPMorgan ETFs are Ucits III-compliant French fonds communs de placement managed by J.P. Morgan Structured Fund Management, a French management company wholly owned by JPMorgan, while J.P. Morgan Securities will act as market-maker and provide liquidity on Euronext Paris.