JP Morgan Asset Management is aiming to democratise hedge fund investing through ETF products launching on the London Stock Exchange today.
The asset manager says the bottom-up long-short funds are the first of their kind for the European market. The products are similar to smart beta, but JPMAM calls the products alternative beta due to their long-short approach.
It pioneered the strategy for Ucits with the JPMorgan Funds Systematic Alpha fund launch in 2009.
The JPMorgan Managed Futures Ucits ETF invests across asset classes with a TER of up to 57bps. The JPMorgan Equity Long-Short Ucits ETF focuses on equities with a TER up to 67bps.
Both strategies will be built using a systematic, rules-based investment approach and aim to produce uncorrelated returns.
“We’re now the first provider in Europe to introduce systematic, bottom-up capture of hedge funds styles into an ETF,” says head of European funds Massimo Greco.
International head of ETFs Bryon Lake says both strategies aim to reduce a portfolio’s overall volatility without sacrificing return potential.
“The increasing availability of lower cost, more liquid and transparent forms of alternative investing has gradually been democratising hedge fund investing for the last several years,” Lake says.
Both ETFs were designed by JPMAM’s quantitative beta strategies team, consisting of quantitative research analysts and portfolio managers dedicated to factor-based investing across strategic beta (long-only) and alternative beta (long-short) strategies.