Daily ETF Watch: Morgan Debuts Europe Fund

December 21, 2015

Today J.P. Morgan Asset Management rolled out another fund in its family of multifactor smart-beta ETFs on the NYSE Arca. The JPMorgan Diversified Return Europe Equity ETF (JPEU) joins four other ETFs based on similar methodologies.

J.P. Morgan’s Diversified Return ETF family targets the valuation, momentum and quality factors, and tracks indexes provided by FTSE Russell.

JPEU comes with an expense ratio of 0.43%.

RevenueShares Acquired

Based on an announcement last week, it looks like Oppenheimer Funds, with $220 million under management, is entering the ETF space. The firm, known for its active management strategies, is acquiring VTL Associates, which owns the RevenueShares ETFs.

The first RevenueShares funds, which weighted their holdings based on revenues, launched in 2008. The family currently includes eight funds, all of which have already been rebranded with the Oppenheimer name. According to the press release, VTL Associates has a total of $1.7 billion in assets under management; roughly $1 billion of that is invested in the RevenueShares ETFs.

By purchasing VTL Associates, Oppenheimer is gaining the firm’s exemptive relief to launch ETFs, meaning it could start launching its own products any day now. Should it roll out its own ETFs, Oppenheimer will join the ranks of the traditionally active management mutual fund firms entering the ETF space, alongside the likes of John Hancock, J.P. Morgan and others.

The press release seemed to indicate that Oppenheimer will continue with the quasi-active smart-beta strategies pursued by RevenueShares, with Oppenheimer head Art Steinmetz noting, “VTL's distinctive approach to smart beta is an outstanding addition to our compelling array of investment strategies across all asset classes."

The press release did not mention how much Oppenheimer is paying for VTL.

First Trust Revamps 2 Funds

First Trust has restructured two of its ETFs, providing them with new names, underlying indexes and tickers. The First Trust ISE Global Copper Index Fund (CU | F-80) and the First Trust ISE Global Platinum Index Fund (PLTM | F-100) have become the First Trust Indxx Global Natural Resources Income ETF (FTRI) and the First Trust Indxx Global Agriculture ETF (FTAG), respectively.

Both CU and PLTM were launched in 2010, and neither gathered much in the way of assets; however, both the natural resources and agriculture spaces have been attracting investor attention lately.

FTRI’s index covers the 50 companies involved the exploration and production side of the natural resources space that pay the highest dividends. However, the index will be weighted by free-float market capitalization. Companies can be involved in the energy, materials, agriculture, water and timber industries, according to the prospectus.

Meanwhile, FTAG’s index had 45 components in early December. Eligible components must have market capitalizations of at least $1 billion and meet liquidity thresholds. It can include companies involved in all aspects of farming, including agricultural chemicals, companies that own farmland, producers of farming machinery, and equipment and seed providers.

The funds will continue to list on the Nasdaq stock exchange, and their expense ratios will remain at 0.70%.

The transition became effective as of Dec. 18, 2015.


Contact Heather Bell at [email protected].

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