JP Morgan AM unveils multi-factor high yield ETF

Yazann Romahi, CIO of Quantitative Beta Solutions at JPMAM

JP Morgan Asset Management (JPMAM) has expanded its fixed income ETF range with the launch of a multi-factor high yield product.

The JPMorgan Global High Yield Corporate Bond Multi-Factor UCITS ETF (JGHY) is listed on the London Stock Exchange, the Deutsche Börse and the Borsa Italiana with a total expense ratio (TER) of 0.35%.

JGHY tracks the J.P. Morgan Asset Management Global High Yield Multi-Factor index which has been created by JPMAM’s self-indexing unit based on research from the Quantitative Beta Solutions team.

Offering exposure to global corporate high yield bonds across developed and emerging markets, JGHY combines value, momentum and quality factors.

ETF providers in smart beta catch 22

Yazann Romahi (pictured), CIO of Quantitative Beta Solutions at JPMAM, said: “We believe we are reaching a tipping point for factor investing in fixed income.

“The investment industry has, for the most part, tended to gravitate towards factor investing within cash equity markets and long-short alternative futures strategies where data has been more readily available.

“Based on our research, factors like value, quality and momentum are asset class agnostic and very much alive and present in credit markets.”

Smart beta fixed income is slowly starting to gain traction, however, investors have bemoaned the lack of ETFs in this area. According to the latest Invesco Global Factor Investing survey, 86% of wholesale respondents said fixed income smart beta was not adequately covered by the current product set.

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