JPMorgan Asset Management is listing two of its most popular exchange-traded funds on the Toronto Stock Exchange to tap into the country’s fast-growing $350 billion ETF market.
On Tuesday, the $36 billion JPMorgan US Equity Premium Income Active ETF (JEPI) and the $16.7 billion JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) were made available to Canadian investors.
JEPI, the largest actively managed ETF, employs a covered call strategy that introduces an income component that reduces upside and downside performance of an underlying large-cap growth index of stocks.
The strategy has been among the most popular ETFs since its debut in May 2020 because of its appeal among risk-averse investors who still want exposure to equity markets.
According to Morningstar, JEPI experienced mild outflows in August, marking the first month in its history that the fund didn’t have net inflows.
Ryan Jackson, senior manager research analyst at Morningstar, attributed JEPI’s rare monthly net outflows to “increased competition, some of which is coming from inside JPMorgan.”
JEPQ, which was introduced in May 2022, employs a similar covered call strategy as JEPI, but tracks the Nasdaq-100 Index.
Capital Appreciation Potential
JPMorgan’s announcement described the two ETFs as providing the “potential for capital appreciation through a focus on equities and that offer Canadian investors the opportunity to access a steady income stream.”
Travis Hughes, head of Canada, J.P. Morgan Asset Management, in a prepared statement said, “The introduction of the J.P. Morgan ETFs in Canada is an important advancement of our Canada market strategy, with these offerings representing the first of a broad suite of active ETF solutions we plan to deliver over time.”
“As home to the first ETF, Canada is an ideal market for these offerings,” he added. “The listing of JEPI and JEPQ is a significant milestone for JPMAM as it brings focus to both the firm’s success as an active manager and the breadth and depth of its global products.”
JPMorgan Asset Management, which entered the U.S. ETF market in 2014, currently has 64 ETFs that total more than $165 billion.
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