JP Morgan Asset Management has launched its latest active ETF, the JPM USD High Yield Bond Active UCITS ETF (LSE ticker: JPHY) on the London Stock Exchange, Deutsche Börse Xetra, Borsa Italiana and SIX Swiss Exchange.
The fund is the firm’s first fundamentally-driven, actively managed, high-yield focused strategy within an ETF wrapper.
The launch of JPHY occurs at a crucial time for the global fixed income market, which continues to expand. By 2030, JPMAM forecasts that the global fixed income ETF market will grow to $6 trillion, while the active fixed income ETF market is expected to reach $1.7 trillion. As global interest rates begin to shift, JPHY presents itself as a promising option for investors aiming to navigate these market dynamics.
JPHY, which builds on JPMAM’s $55bn + US high yield platform, leverages the flexibility and liquidity advantages inherent in the ETF structure. The active management approach is crucial in the high-yield market, where the asymmetrical return profiles of securities demand expert selection and risk management.
The ETF, which targets income and capital appreciation, uses a time-tested process by identifying mispriced securities and adapting to market cycle changes. In doing so, the investment team will actively manage risk and aim to deliver above market returns in all market environments.
“Launching JPHY is a significant milestone in our commitment to providing innovative active fixed income investment solutions,” said Travis Spence, Global Head of ETFs at JP Morgan Asset Management. “JPHY exemplifies the enhanced liquidity and transparency that ETFs offer, particularly in times of market volatility. Our deep credit research and active management expertise offers a compelling alternative to passive and is a valuable tool for investors navigating today’s markets.”
“Active management is not only proven but preferred in fixed income, and with the additional benefits that ETFs provide investors, we believe that active fixed income ETFs will be a key driver for the overall ETF industry. We remain committed to providing investors with a range of active portfolio building blocks across the fixed income spectrum.”
Classified as Article 8 under the SFDR, JPHY will seek to outperform the ICE BofA US High Yield Constrained Index over the long-term, a benchmark which consists of USD-dominated high yield corporate bonds from developed markets. JPHY will be managed by a seasoned team of credit analysts and portfolio managers, including Robert Cook, Thomas Hauser, Jeffrey Lovell, John Lux, and Edward Gibbons. The ETF will have a Total Expense Ratio of 45 basis points.
