JPMAM launches global equity premium ETF
JP Morgan Asset Management (JPMAM) has listed its latest exchange-traded fund (ETF) product, which seeks to generate a consistent annualised income of 7–9 per cent.
The asset manager has launched its JPMorgan Global Equity Premium Income Complex ETF (JEGA) on the ASX.
The actively managed outcome-oriented ETF strategy looks to produce an income of 7–9 per cent annualised each month, combining equities with options to balance yield, capital growth and risk.
JPMAM’s new ETF belongs to the same equity premium income family as the JPMorgan Equity Premium Income ETF (JEPI), currently the world’s largest active ETF, according to Bloomberg.
JEGA’s long-only equity portfolio harnesses the firm’s active equity expertise and aims to enhance index returns through its proprietary research.
Mark Carlile, head of wholesale for JPMAM Australia and New Zealand, noted that investors are seeking high levels and exposure to stock markets with less volatility.
“We have seen the rapid growth in our option overlay US equity strategies over the past couple of years, and we are delighted to bring a global equity version to join our equity premium income suite of products. Australian investors, who have long enjoyed dividend income from domestic equities, now have the opportunity to earn income from their international equity investments,” he explained.
According to Carlile, the ETF meets investors’ needs in three key ways:
- Consistent income generation from monthly payouts.
- Providing a more conservative exposure.
- An alternative source of income to bonds.
Andrew Creber, chief executive of JPMAM Australia and New Zealand, said: “The launch of JEGA adds another dimension to our already strong equity premium suite of strategies. For those who are seeking income, or income with lower volatility or simply to diversify their equity exposure, these objectives may be met by adding any one of these strategies or a combination of all three to a portfolio.”
Portfolio managers Piera Elisa Grassi and Nicolas Farserotu will lead the ETF’s management and have access to over 90 research analysts covering approximately 2,500 securities globally.
They use these insights to take small overweight positions in attractive opportunities and small underweights in less promising names, building a high-quality and lower-beta portfolio that is diversified across regions and sectors.
An options strategy is then applied where portfolio managers Hamilton Reiner, Judy Jansen and
Matthew Bensen sell index options – a combination of S&P500 and MSCI EAFE – against the ETF’s long-only equity portfolio and use the premiums to generate income opportunities.
AUTHOR
Jasmine Siljic
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