A recent filing from J.P. Morgan outlines the issuer’s plans to launch an actively managed fixed-income ETF that will seek to achieve a high level of income by investing in a range of credit qualities. The mostly domestic JPMorgan Core Plus Bond ETF will invest in a range of corporate, government and mortgage-/asset-backed debt.
According to the prospectus, the fund will generally target an average weighted maturity of five to 20 years. The portfolio will generally have a 65/35 split between companies that are rated investment grade at purchase, and those rated below investment grade.
As much as 35% of the portfolio can be invested in non-U.S. debt, which can also be denominated in non-U.S. currencies. And although the prospectus says that the fund may have considerable investments in mortgage-related or mortgage-backed debt, subprime debt is limited to 10% of the portfolio.
In general, the fund’s managers will rely on risk/reward analysis to select fixed-income securities, taking into account interest-rate, currency and credit risk, among other factors. The fund can use derivatives in its strategies, as well as implement currency and inflation hedging, the document notes.
J.P. Morgan currently offers four fixed-income ETFs, three of which are actively managed. The filing does not include a ticker, expense ratio or listing exchange.
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