JP Morgan Expands Muni ETF Lineup

October 31, 2018

Today, J.P. Morgan has rolled out an actively managed fund covering the intermediate municipal bond space. The JPMorgan Municipal ETF (JMUB) arrives on the heels of the JPMorgan Ultra-Short Municipal ETF (JMST), which launched earlier this month.

JMUB comes with an expense ratio of 0.24% and lists on Cboe Global Markets, parent company of ETF.com.

“JMST has a lower duration to help mitigate interest rate risk while offering the potential for higher yield relative to money market funds,” said J.P. Morgan’s head of ETF distribution, Jillian DelSignore, adding that, “JMUB, on the other hand, focuses on investment-grade municipal securities, but has the ability to tactically enter the high-yield municipal space as opportunities emerge.”

Fund Details

The fund can invest in a broad range of municipal debt, including municipal obligations, which can represent up to 25% of the portfolio. JMUB mostly invests in investment-grade securities, but up to 10% of the portfolio may be invested in junk bonds, the prospectus says.

“The fund has the ability to invest in a wide range of credits, extending to high yield, but focuses predominantly on investment-grade intermediate municipal bonds,” DelSignore said.

The average weighted maturity of the fund is expected to fall in between three and 10 years, with the document noting that longer average weighted maturities mean investors can expect more share price fluctuations.

JMUB takes a long-term, value-oriented approach to investing that evaluates each security’s interest rate risk, credit risk, duration, liquidity and the underlying technical and legal structure of the transaction represented by the security, the prospectus says.

Franklin Templeton launched a similar fund about a year ago. The Franklin Liberty Intermediate Municipal Opportunities ETF (FLMI) is another intermediate-term actively managed muni fund. It charges 0.30% in expense ratio, more than JMUB, and has only gathered about $7 million in assets under management.

Contact Heather Bell at [email protected]

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