JPMorgan Sunsets Active International ETF
The firm closed the fund along with another ActiveBuilder-branded fund.
J.P. Morgan Asset Management, the investment branch of banking giant JPMorgan Chase, is liquidating an active international ETF after it failed to garner significant assets in two years of trading.
The JPMorgan ActiveBuilders International Equity ETF (JIDA) stopped trading Oct. 10, and will liquidate Oct. 18. JPMorgan announced in August that it would shutter the exchange-traded fund, along with the JPMorgan ActiveBuilders U.S. Large Cap Equity ETF (JUSA). The ActiveBuilders U.S. Large Cap Equity fund stopped trading last month.
The funds, which both came to market in July 2021, were pushed by the firm to expand into active management. As the number and variety of ETFs on the market grows rapidly, firms are increasingly looking to differentiate their products with more involved portfolio managers who seek to beat broad indexes.
Yet these two active JPMorgan ETFs failed to compel investors. The ActiveBuilders International Equity ETF, which invested in global equities of varied market caps, never drew assets under management above roughly $32 million. The fund also never meaningfully beat its benchmark, the MSCI EAFE Index. But its expense ratio of 0.25% placed it at a relatively competitive price, as the average active ETF has fees of 0.69%.
The fund, which was led by Nick Horne, Philippa Clough and Bruno Baisch, has seen onnly about $9 million in inflows since launching and gained 8.3% year to date, which roughly tracks its benchmark.
JEPI a Tough Act to Follow
JPMorgan operates the largest active ETF, the JPMorgan Equity Premium Income ETF (JEPI), which has $29.2 billion in assets.
Despite the shuttering of its two small funds, the firm continues its push to expand active management. Most recently, it launched an active ETF with an options overlay strategy from the same portfolio manager that operates the wildly successful Equity Premium Income fund, Hamilton Reiner.
The $926 million JPMorgan ActiveBuilders Emerging Markets Equity ETF (JEMA) is the only surviving fund of the three launched in July 2021 to round out the asset manager’s “ActiveBuilder” core equity product line. The fund is up about 1% year to date.
J.P. Morgan Asset Management has 61 ETFs trading with $116.3 billion in assets across them.
