Daily ETF Watch: JP Morgan Plans US Fund

July 21, 2014

J.P. Morgan, a month after its first ETF rollout, put into registration another quasi-active “smart beta” factor-focused fund that will invest in domestic markets, the latest sign the big investment bank is serious about its plans to move into the world of exchange-traded funds.

The JPMorgan Diversified Return U.S. Equity ETF will track the FTSE U.S. Diversified Factor Index, which comprises U.S. equity securities selected to represent a diversified set of factor characteristics, including relative valuation, price momentum and quality, according to the regulatory filing.

The filing follows by a month the company’s launch of the JPMorgan Diversified Return Global Equity ETF (JPGE), another smart-beta strategy, which has an annual expense ratio of 0.38 percent, or $38 for each $10,000 invested. J.P. Morgan has put two other funds into registration. They are:

The latest filing comes at a time when smart-beta ETFs are increasing in popularity. J.P. Morgan has indicated it wants to stake a claim in smart-beta ETFs and, moreover, will likely bring bona fide active strategies to market as well. Few doubt that J.P. Morgan has the marketing muscle to promote its growing lineup of funds as aggressively as any firm already established as an ETF issuer.

The newest filing detailing the U.S-focused fund said stocks in the portfolio will be diversified across industries and will include large- and midcap equity securities and real estate investment trusts.

J.P. Morgan didn’t include the fund’s expense ratio or ticker in the filing.

Filing

       

Direxion put into registration eight leveraged and inverse ETFs focusing on the equity and fixed-income markets at a time when the S&P 500 Index is reaching new highs and the Federal Reserve is signaling that increases in official rates could happen in 2015.

The S&P has reached new highs this year after a 32 percent surge last year, but many analysts and advisors reckon a correction may be coming. Also, Janet Yellen has signaled that the central bank may raise rates sooner rather than later in 2015 as the labor market continues to improve.

Direxion’s proposed funds are looking to give investors the ability to invest in rising as well as falling markets, but the firm stresses in its filing that the funds are for investors who seek daily leveraged and inverse investment results.

The newly leveraged proposed funds along with associated tickers and fees include the:

  • Direxion Daily Mid Cap Bull 2X Shares (MDLL), 0.66 percent, or $66 for every $10,000 invested
  • Direxion Daily Small Cap Bull 2X Shares (SMLL), 0.66 percent
  • Direxion Daily 7-10 Year Treasury Bull 2X Shares (SYTL), 0.65 percent
  • Direxion Daily 20+ Year Treasury Bull 2X Shares (TYTL), 0.70 percent

And the newly proposed inverse funds include the following funds, which all have a 0.60 percent expense ratio:

  • Direxion Daily Mid Cap Bear 2X Shares (MDSS)
  • Direxion Daily Small Cap Bear 2X Shares (SMSS)
  • Direxion Daily 7-10 Year Treasury Bear 2X Shares (SYTS)
  • Direxion Daily 20+ Year Treasury Bear 2X Shares (TYTS)

 

 

 

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