JPMorgan is Launching A New ETF, Are These Existing Ones A Better Bet?

Benzinga
05 Sep 2024

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If it seems like a new exchange-traded fund (ETF) is launching every day, that’s not far off. Data from Morningstar Direct says an average of 50 ETFs will be launched per day in 2024, up from 48 a day last year. There's good reason for the trend: ETFs saw $413 billion in inflows for the first half of 2024. 

JPMorgan Chase & Co., which launched three data-driven ETFs in August, will add to the mix with an SEC filing for its newest ETF, the JPMorgan Flexible Income ETF (JFLI). The fund is casting a wide net. It will invest in income-producing securities, including debt and equity securities in the U.S. and other markets worldwide. There is no limit on the number of countries the Fund may invest in. The fund will invest in underlying funds, including mutual funds and ETFs. The fund will take on some risk, as it plans to invest up to 70% of its funds in junk bonds. It can also invest up to 35% of its assets in loan assignments and participation. It may also invest up to 90% of its assets in equity securities, including REITs. It will have a net expense ratio of 0.35%.

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Not New, But Worth A Look

Investing in a new ETF is always a little risky because the fund has no track record of performance. JPMorgan Chase has a very successful ETF track record. According to ETF.com, it currently has 64 ETFs traded in U.S. markets, and its total assets under management are at $165.8 billion. Its most popular fund is JPMorgan Equity Premium Income ETF (NYSE:JEPI), with $34.8 billion in assets. It generates monthly income for investors by selling options and investing in U.S. large-cap stocks. The focus is on a low-volatility equity portfolio that delivers returns close to the S&P 500 Index with less volatility. It has a trailing twelve-month yield of 7.02%. Top holdings include Progressive, Trane Technologies, Meta Platforms, and AbbVie. 

The JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) is designed to deliver monthly distributable income. Instead of the S&P 500, it focuses on the Nasdaq 100. The fund uses an applied data science approach to fundamental research and portfolio construction. It uses out-of-the-money call options and has a 12-month rolling dividend yield of 9.2%. Unsurprisingly, the top four holdings are Apple, Microsoft, Nvidia, and Amazon.

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The JPMorgan Income ETF (NYSE:JPIE) may fit the bill for a fixed-income approach. The fund’s managers focus on the best income ideas of a global team of 300+ investment professionals. The fund balances solid income with low volatility. It has a 12-month yield of 6.1%. Holdings are focused on agency mortgage-backed securities (MBS), non-agency MBS, commercial MBS, and asset-backed securities. While its holdings are always subject to change, it is currently heavily focused on agency MBS, and its top holdings are all bonds tied to the Government National Mortgage Association (GNMA or Ginnie Mae). This reduces its credit risk exposure. 

Two funds should be taken off your watch list. The company is liquidating JPMorgan BetaBuilders U.S. TIPS 0-5 Year ETF (BATS:BBIP) and JPMorgan BetaBuilders 1-5 Year U.S. Aggregate Bond ETF (BATS:BBSA). More JPMorgan ETFs could be coming soon. J.P. Morgan Asset Management recently appointed Travis Spence as Global Head of ETFs. Spence has been with the company for over 20 years. “Our ETF franchise will continue to be anchored by our deep fundamental and quantitative research, active management, and risk management capabilities – supported by the deep expertise of our ETF specialists, product development, capital markets and strong client relationships across every region,” said Spence. 

These ETFs are just one small fraction of a larger universe. A balanced portfolio may incorporate various approaches for growth, diversification, and dividend yield. As with new stocks debuting on an exchange, it may make sense to watch a new ETF for a little while before investing. 

Can You Do Better Outside The Market? 

The current high-interest-rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through ETFs... Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider. 

For example, the Jeff Bezos-backed investment platform just launched its Private Credit Fund, which provides access to a pool of short-term loans backed by residential real estate with a target 7% to 9% net annual yield paid to investors monthly. The best part? Unlike other private credit funds, this one has a minimum investment of only $100. 

Don't miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga's favorite high-yield offerings. 

This article JPMorgan is Launching A New ETF, Are These Existing Ones A Better Bet? originally appeared on Benzinga.com

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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