JP Morgan Asset Management brings to the European market two of the top-performing active ETFs in the North American market. Specifically, these are the JPMorgan US Equity Premium Income Active UCITS ETF and JPMorgan Nasdaq Equity Premium Income Active UCITS ETF, which are part of their actively managed Equity Premium Income ETF range in UCITS form. The asset manager has announced that both vehicles have begun trading on the London Stock Exchange.
Additionally, they note that these two active ETF strategies come on the heels of strong demand from U.S. investors since their launch in the U.S. “Specifically, as of October 24, the JPMorgan US Equity Premium Income Active ETF is the largest actively managed ETF in the world, with $36.6 billion in assets under management; and the JPMorgan Nasdaq Equity Premium Income Active ETF, with $17.6 billion under management, is one of the fastest-growing active ETFs in the U.S.,” they highlight.
By launching the UCITS version of these funds, the JPMAM Equity Premium Income UCITS ETF range now consists of three funds: the JPMorgan Global Equity Premium Income Active UCITS ETF, launched in December 2023, and the two newly listed in Europe. “Each ETF aims to offer investors consistent monthly income and the potential for equity market appreciation, with lower volatility, by combining active equity portfolios with options,” the asset manager adds.
Regarding these funds, the manager explains that both leverage a fundamental bottom-up analysis process to build higher-quality, lower-beta equity portfolios relative to their respective benchmark indices—the MSCI World in the case of the first fund, and the S&P 500 in the case of the second. The Nasdaq Equity Premium Income Active ETF utilizes a proprietary process based on more than 40 years of accumulated experience and data by J.P. Morgan, creating a portfolio fundamentally linked to the Nasdaq 100.
Each ETF applies an index options strategy, where the investment team, led by Hamilton Reiner, sells weekly options on the index, using the premiums to generate income. The premiums received from these option sales are distributed monthly, along with the dividends received from the underlying equities included in each ETF.
According to the asset manager, this process results in an Equity Premium Income range of income ETFs, designed to reduce downside exposure by giving up some future market upside participation in exchange for current income. By selling options weekly, the ETFs can adapt to changing market conditions. For example, when volatility increases, each ETF has the potential to provide higher income, offering investors protection against price fluctuations.
“We are delighted to expand our Equity Premium Income UCITS range with the launch of JEPI and JEPQ. These innovative and market-leading strategies, which have been in high demand in the U.S., offer investors an attractive solution to achieve their income and total return goals with reduced volatility. Over the past five years, we have worked closely with investors to build stronger portfolios with Equity Premium Income strategies, and we are pleased to now share this expertise and these unique solutions with our clients who require these vehicles in UCITS form,” says Travis Spence, Global Head of ETFs at J.P. Morgan Asset Management.
