J.P. Morgan Cuts Fees for New ETF
J.P. Morgan moves closer to zero fees for its passive products in order to gain a stronger foothold in the growing market for low-cost investments.
J.P. Morgan Chase's investment arm has shaved management fees for a new exchange-traded fund (ETF), setting a new floor for fees in such products so as to increase its market share for passive investing.
The U.S. asset manager on Monday launched the J.P. Morgan BetaBuilders US Equity ETF, tracking large and mid-sized US stocks and seeking investment results closely corresponding to the Morningstar US Target Market Exposure index.
«These launches add to our full range of active, strategic beta and passive ETF options, helping clients build stronger portfolios,» said Ogden Hammond, global head of beta product and business development for JPMAM who was quoted in the FT (behind paywall).
Passives Getting Popular
Last year $472 billion flowed towards passive funds, while $488 billion was drained from active equity funds around the world, according to EPFR data. Unlike mutual funds, whereby some investors wanting to cash out must wait until the end of a trading day, ETFs can offer near-constant liquidity.
The competition on fees between large fund managers hit a new level of intensity last year when Fidelity Investments forgo fees altogether on some index funds.
