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JP Morgan AM launches currency-hedged share class versions of two ETFs

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JP Morgan Asset Management (JPMAM) has launched four new currency-hedged share class versions of two of its existing alternative beta strategy ETFs which first listed on the London Stock Exchange in November 2017.

Sterling and Euro hedged share classes of JPM Equity Long-Short UCITS ETF (JELS) and JPM Managed Futures UCITS ETF (JPMF) have listed across the London Stock Exchange (LSE), Deutsche Boerse Xetra and Borsa Italiana.

The following ETFs have listed on the LSE and will list on the SIX Swiss Exchange in due course: JPM Equity Long-Short UCITS ETF – GBP Hedged (acc) (JLSP); JPM Equity Long-Short UCITS ETF – EUR Hedged (acc) (JLSE); JPM Managed Futures UCTIS ETF – GBP Hedged (acc) (JMFP); and JPM Managed Futures UCITs ETF – EUR Hedged (acc)(JMFE).

The Euro Hedged share classes have listed on the Deutsche Boerse Xetra (JLEE and JMFE) and Borsa Italiana (JLSE and JMFE).

Bryon Lake, International Head of ETFs at JP Morgan Asset Management, says: “As we continue to broaden our reach across UK and continental Europe we’re both listening and responding to client needs. Currency hedging can help investors mitigate the impact of foreign exchange movements on their investment returns. Having access to home currencies, via these currency-hedged share classes, should help clients meet both their operational and/or legal requirements.”

The ETFs seek to provide returns similar to hedge fund strategies by using advanced factor based investing techniques. The hedged and un-hedged share classes will have the same total expense ratio (TER). Managed Futures has a TER of up to 57 basis points and Equity Long-Short has a TER of up to 67 basis points.

Several different hedging models exist to mitigate currency risk. JPMAM has adopted a tolerance-adjusted hedging model in its UCITS ETFs currency-hedge share classes. This means currency hedges are regularly adjusted by JPMAM’s Currency Management Team whenever hedge ratios breach pre-set thresholds which should provide a more accurate currency hedge for ETF investors at all times.

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