ETF Watch: JP Morgan Debuts Global Bond Fund

Today J.P. Morgan is rolling out a “go anywhere” fixed-income ETF. The JPMorgan Global Bond Opportunities ETF (JPGB) is the firm’s second active bond ETF, and comes with an expense ratio of 0.55%.

The fund is listed on the Bats exchange, which is owned by ETF.com's parent company, CBOE.

JPGB looks to provide total return by seeking opportunities in the full range of fixed-income sectors in developed and emerging markets, as well as across strategies and currencies, the prospectus said. It noted that the fund will invest conservatively during periods of uncertainty and take on more risk in improving markets.

“Really, [JPGB] is a global, best-ideas, unconstrained fixed-income ETF. It’s really our ability to bring the global research capability of J.P. Morgan into the ETF marketplace,” said Jillian DelSignore, J.P. Morgan Asset Management’s head of ETF distribution. She added that an important differentiator of the fund is that it has less of a focus on core bond exposures and takes more of a sector approach.

'Key Gap'

“We identified what we think is a key gap in the marketplace for this type of product,” DelSignore said.

JPGB is managed by Bob Michele, head of J.P. Morgan’s Global Fixed Income, Currency & Commodities group. The fund will draw on his 35 years of experience in global fixed-income portfolio management and also the input of the firm’s global fixed-income team, which includes some 200 sector specialists.

“Our network of global experts and research analysts can scour the globe for opportunities in any market cycle, and their extensive experience with this type of investing is unrivaled,” said Bob Deutsch, U.S. head of ETFs for J.P. Morgan Asset Management.    

JPGB will invest at least 40% of its assets outside the United States, and the portfolio will include securities from issuers representing at least three non-U.S. countries. However, at least half the fund’s assets will be either denominated in or hedged back to U.S. dollars. Generally, at least one-quarter of the fund’s portfolio will be in below-investment-grade debt.

No Target Duration

The fund has no target duration, but is able to increase its duration if market conditions necessitate it.

While there are quite a few global bond ETFs out there that either carry the label “unconstrained” or have similarly broad latitude with regard to their investments, the largest comparable product would have to be the SPDR DoubleLine Total Return Tactical ETF (TOTL) managed by Jeffrey Gundlach of DoubleLine Capital. The now $3.2 billion fund launched in 2015 and quickly grew from there.

Contact Heather Bell at [email protected].