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JPMAM launches first equity multi-factor ETFs in Europe


JP Morgan Asset Management (JPMAM) has launched its first equity multi-factor UCITS ETFs in Europe following the successful launch of a multi-factor offering in the US. 

 JPMorgan Global Equity Multi-Factor UCITS ETF (tickers: JPGL) and JPMorgan US Equity Multi-Factor UCITS ETF (tickers: JPUS) are now available on the London Stock Exchange, Deutsche Börse Xetra and the Borsa Italiana. JPMAM has also expanded its BetaBuilders line-up with the launch of JPM BetaBuilders US Treasury Bond 0-1 yr UCITS ETF (ticker: BBIL).
JPMAM’s multi-factor equity ETFs seek to address some of the limitations of traditional market cap-weighted equity indices. Traditional indices can be highly concentrated in certain sectors so JPMAM’s Quantitative Beta Strategies (QBS) team will seek to adjust sector weightings in JPGL and JPUS based on a proprietary methodology. By doing so, risk will be distributed more evenly, resulting in additional diversification. JPMAM’s QBS team will then screen stocks based on proprietary factor research and diversify across three factors – value, quality, momentum – that have proven to be historical drivers of performance.
JPGL will track the JP Morgan Diversified Factor Global Developed (Region Aware) Equity Index which has produced strong long-term outperformance relative to the FTSE Developed Index. JPUS will track the JP Morgan Diversified Factor US Equity Index which has produced strong long-term outperformance relative to the Russell 1000 Index. Both ETFs, which aim to improve diversification, lower volatility and enhance risk-adjusted returns, will have a Total Expense Ratio (TER) of 19 basis points.
Bryon Lake, Head of International ETFs at JP Morgan Asset Management, says: “Our multi-factor equity ETFs have been designed to help keep investors fully invested across market cycles. JPGL and JPUS both have the potential to capture most of the upside in equity markets while providing less volatility in down markets. We’ve received a lot of client interest in these types of strategies. Multi-factor ETFs are a fast-growing area of the fund universe and we’re delighted to be able to offer clients a new and attractively priced solution to help support their overall asset allocation needs.”
JPMAM has also expanded its fixed income ETF offering with the launch of BBIL which is now available on the London Stock Exchange, Deutsche Börse Xetra and the Borsa Italiana. BBIL will closely track the ICE 0-1 Year US Treasury Securities Index. For investors looking for a short-dated dollar-denominated government debt allocation, BBIL offers efficient access to a “building block” that’s simple and straightforward. BBIL will have a TER of 10 basis points.

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