- Advertisement -
- Advertisement -

J.P. Morgan Set to Launch Hedge Fund ETFs in Europe

- Advertisement -

Stockholm (HedgeNordic) – J.P. Morgan Asset Management is preparing to launch a set of hedge fund exchange-traded funds for the private client and retail market in the UK and Europe in an attempt to “democratize” hedge fund investing.

Hedge fund ETFs employ a wide range of strategies used by hedge fund managers, including long/short, managed futures and market neutral, among others, to capture the systematic component of hedge fund returns, known as alternative beta. ETFs employing hedge-fund-type strategies allow investors to simulate hedge fund exposure without having to meet rigorous hedge fund requirements and pay hefty fees.

The world’s third-largest alternative asset manager plans to launch strategies run by its alternative beta fund, JPMorgan Funds – Systematic Alpha Fund, as single-strategy ETFs in Europe. The EUR 2.28 billion fund was launched in July 2009 by Yazann Romahi, Chief Investment Officer of quantitative beta strategies at J.P. Morgan, and executes event-driven and macro investing. Romahi will be in charge of managing the soon-to-be created ETFs.

J.P. Morgan Asset Management’s ETF suite of products currently features 13 product offerings with more than $1 billion in AUM. The U.S. asset manager has put renewed efforts into expanding its non-U.S. ETF business, as suggested by the hiring of Byron Lake, former European head of Investco’s PowerShares ETF business, to lead international expansion.

J.P. Morgan’s push to expand its beta strategies platform on the European continent comes after the September 2016 launch of the firm’s first alternative and actively managed ETF in North America. The J.P. Morgan Diversified Alternative ETF provides hedge fund exposure by diversifying across equity long/short strategies, event-driven strategies, and global macro strategies. According to J.P. Morgan, hedge fund strategies have historically increased diversification, reduced portfolio volatility and generated higher risk-adjusted returns when added to traditional stock/bond portfolios. Therefore, the ETFs employing hedge-fund-type strategies can serve as core components of an alternatives allocation within a portfolio.

A J.P. Morgan’s spokesperson told Financial News that the U.S. asset manager’s long-term plan involves building “a full-scale, global and alternative beta ETF capability to serve the needs of clients globally. Having initially focused our efforts in the US, expansion on a European Ucits platform represents a logical next step for broader international distribution. This expansion will include making our alternative beta capabilities available to European investors in ETFs,” the spokesperson added.

The asset manager’s expansion efforts come at a time when the hedge fund ETF industry is losing a great deal of assets, as the tactics underperformed benchmark equity and bond indexes. A Bloomberg report says investors pulled out approximately 4.5% of assets from U.S.-listed alternative ETFs in the first quarter of the year, the biggest quarterly outflow since early 2014.

close

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

Latest Articles

Brobacke is Back in the Game

Stockholm (HedgeNordic) – There is significant heterogeneity in the universe of multi-asset investment solutions. Despite an extensive variety of approaches, Nils Brobacke still saw...

January: Mirror Image of 2022 for Nordic CTAs

Stockholm (HedgeNordic) – The average return of the eight “CTA” constituents of the Nordic Hedge Index that had positive performance in 2022 was 14.4...

Did Energy Prices Cause This Inflation Surge?

Copenhagen – (Jesper Rangvid): You often hear that soaring energy prices, caused by supply-chain disruptions resulting from the pandemic and the war in Ukraine,...

UB Launches Forest-Focused PE Fund

Stockholm (HedgeNordic) – United Bankers is launching a private equity fund investing in forest and bio-based industries. The fund, named UB Forest Industry Green...

Origo’s First Ten Years on (a) Quest

Stockholm (HedgeNordic) – Long/short equity fund Origo Quest is celebrating ten years of bargain hunting in the universe of Nordic small-cap stocks. After a...

The Cycle is Back and so is Active Investing

Stockholm (HedgeNordic) – The relationship between equities and bonds has traditionally been inverse, making bonds a leading choice as a diversifier to an equities...

Latest

Most Popular This Week

Voices

Request for Proposal

- Advertisement -