JPMorgan Converting 4 More Mutual Funds to ETFs

Moving $2 billion into exchange-traded funds follows recent moves by Fidelity, Dimensional.

JPMorgan & Co. is converting four more mutual funds, worth about $2 billion collectively, into exchange-traded funds, following a trend among big issuers expanding their ETF portfolios.  

This is J.P. Morgan’s second big conversion this year, as the firm switched $9 billion worth of mutual funds to ETFs in June. The conversions would add to J.P. Morgan’s ETF assets of nearly $81 billion among 46 funds. 

More than a dozen mutual funds have converted to ETFs this year at issuers including Fidelity Investments, Kovitz Investment Group Partners and Dimensional Fund Advisors.  

ETFs have been steadily eating away at the market share of mutual funds, which have shed more than $950 billion in 2022 thus far, compared with the nearly $13 billion lost last year. Meanwhile, ETFs have recorded nearly $588 billion in inflows to date, compared with the $920 billion the industry pulled in last year, according to data from Bloomberg.  

J.P. Morgan “believes shareholders in these mutual funds could benefit from reduced costs,” according to the filing. ETFs traditionally offer lower management fees and enhanced tax benefits compared to their mutual fund counterparts.  

Thirty-eight mutual funds with nearly $62 billion in assets have been converted to ETFs so far this year, according to Bloomberg data. The latest to announce the switch were six of Fidelity’s mutual funds which will convert to actively managed equity funds in June of next year, a first in the firm’s history.  

The mutual funds include the JPMorgan High Yield Municipal Fund, the JPMorgan Sustainable Municipal Income Fund, the JPMorgan Equity Focus Fund and the JPMorgan Limited Duration Bond Fund, according to a regulatory filing. The plan is for them to convert to actively managed ETFs in July upon approval by each fund’s board of directors, according to a company statement. 

Contact Shubham Saharan at [email protected]