The JPMorgan BetaBuilders Canada ETF (BBCA), which launched two weeks ago, has already hit $1 billion in assets under management—or $1.28 billion, to be exact.
That makes BBCA the second-fastest ETF to hit $1 billion in assets, smashing the record set by the asset management firm's similarly branded JPMorgan BetaBuilders Japan ETF (BBJP) last month (read: "JP Morgan Japan ETF Raking In Record Assets").
Only the SPDR Gold Trust (GLD) struck the $1 billion milestone faster, in just three days.
Breezing Past $1 Billion
Since its inception on Aug. 7, BBCA has raked in $1.28 billion in new net inflows.
The flood of money began on Aug. 14, when a modest $5 million entered the fund. After that, however, flows into BBCA exploded, with hundreds of millions of dollars entering the fund each trading day; until Friday, when an influx of $332 million pushed BBCA over the $1 billion top (read: "ETF Of The Week: $750M To New Canada Fund").
Sources: ETF.com, FactSet; data as of Aug. 21, 2018
On Monday, BBCA brought in $183 million, pushing the fund to $1.28 billion. All told, that's an astonishing 15,020% weekly gain in assets under management.
BBCA's megaflows should sound familiar: BBJP exhibited the same explosive growth in July, when, over the course of a week and a half, the fund took in so much money it hit $1 billion faster than any other fund but GLD (read: "ETF Of The Week: JP Morgan's Japan Fund").
Which ETF Hits $1 Billion Next?
The race is on now to see which of J.P. Morgan's other BetaBuilder brand ETFs will strike the $1 billion barrier next.
Technically, the race has already been won by the JPMorgan BetaBuilders Europe ETF (BBEU), which quietly broke the $1 billion barrier Monday. Though the fund had taken in several hundred million dollars in tandem with BBJP back in July, BBEU's flows had slowed for the past few weeks.
However, over the last two trading days, the fund has brought in $674 million in new net money; BBEU's AUM now stands at $1.07 billion.
Meanwhile, the $475 million JPMorgan BetaBuilders Developed Asia ex-Japan ETF (BBAX), which launched at the same time as BBCA two weeks, has also been raking in assets: Since Aug. 16, it has pulled in $464 million in new net money (read: "JP Morgan Adds To BetaBuilders ETFs").
In fact, the only BetaBuilder ETF not to see any inflows this summer—or at all—is the $54 million JPMorgan BetaBuilders MSCI U.S. REIT ETF (BBRE), which launched along with BBJP and BBEU on June 15.
However, judging by the sudden and rapid pace with which its fellow BetaBuilder ETFs have accreted money, BBRE's time may be yet to come.
The Summer To Build A Business
Though J.P. Morgan has had ETFs on the market for years, none of its funds had seen the kind of explosive, overnight success as the BetaBuilders ETFs.
J.P. Morgan launched its first self-branded ETFs in 2016, though its first ETN, the J.P. Morgan Alerian MLP Index ETN (AMJ), launched in 2009.
Before July, many J.P. Morgan ETFs had attracted respectable, if not barn-burning, levels of assets. Though it had a few ETFs larger than $1 billion, such as the J.P. Morgan Diversified Return International Equity ETF (JPIN), most of its funds hovered in the few-hundred-million-dollar range.
Then came BBJP—and now BBCA, and BBEU.
J.P. Morgan Moves Clients In-House
Most of the recent flows we've seen into J.P. Morgan's BetaBuilder funds likely have come from the firm's own asset management clients, as the asset manager anecdotally has been moving its clients out of third-party ETFs and into its own products.
Some of this is implied in the flows. For example, according to J.P. Morgan's most recent 13-F filing, which lists holdings by the asset manager as of June 30, 2018, the firm had $2.58 billion invested in the iShares MSCI Japan ETF (EWJ). That's 12% of all shares outstanding, the largest percentage of any 13-F filer.
Since June 30, however, EWJ has seen outflows of $1.48 billion, while BBJP has taken in $1.81 billion.
Clearly, it isn't a one-to-one match, and it’s difficult to say with any certainty what percentage of daily inflows or outflows originate from which source. But speaking with J.P. Morgan clients and those in the ETF industry, anecdotal evidence suggests a good portion of J.P. Morgan's inflows may be coming from in-house.
BBCA Vs EWC
In the case of BBCA, specifically, this fund is similar to the iShares MSCI Canada ETF (EWC), a 22-year-old ETF in which J.P. Morgan is also a lead investor.
According to J.P. Morgan's most recent 13-F filing, as of June 30, the firm owned 8.9 million shares of EWC, or more than 32% of all shares outstanding—the largest percentage held by a 13-F filer, by far.
J.P. Morgan's holding in EWC had been worth only $253 million, however, a sum much less than the inflows recently witnessed into BBCA.
EWC and BBCA are very similar funds that focus on Canadian large- and midcap equities. Their main difference is that BBCA, which has an expense ratio of 0.19%, is far less than EWC’s 0.49%.
Contact Lara Crigger at [email protected]