The fund represents the next generation of strategic beta ETFs, seeking to provide global equity returns from four distinct return factors and reduced volatility by diversifying risks across regions and sectors. It is designed to be a core global equity allocation.
JPGE is a strategic beta developed market equity ETF that tracks an index co-developed with FTSE Group – the FTSE Developed Diversified Factor Index.
The fund is managed by 18-year veteran Beltran Lastra as the lead portfolio manager. Lastra’s team currently manages $12 billion in AUM globally (as of April 30, 2014).
“We believe that J.P. Morgan has unique investment insights and global capabilities that will be attractive to ETF investors, and this product is an important first step in delivering those capabilities,” said Robert Deutsch, head of the ETF business for J.P. Morgan Asset Management. “J.P. Morgan has grown to one of the largest global mutual fund managers and our ETF offering will be a natural extension our product line-up.”
The fund is designed to provide market participation with lower volatility, and starts with the premise that traditional market-cap weighted and single-factor indices expose investors to excessive risk concentrations and a systematic bias toward overvalued securities. Therefore, the fund seeks to reallocate risk by weighting stocks according to four factors: value, size, momentum and low volatility. Research has shown that these factors, when combined, may offer better risk-adjusted returns.