JPMorgan launches European version of JEPI, the largest active ETF #NewsMarket

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JPMorgan Asset Management has added two US equity income-focused strategies to its range of actively managed exchange traded funds in Europe.

The US asset management group has listed the JPMorgan US Equity Premium Income Active (JEPI) and JPMorgan Nasdaq Equity Premium Income Active Ucits ETFs (JEPQ) in London, Frankfurt and Zurich.

The company has three equity premium income ETFs available to European investors following the launch of its JPMorgan Global Equity Premium Income Ucits ETF in December last year.

The asset management arm of US lender JPMorgan said the two new “outcome-oriented” strategies for European clients had enjoyed “strong demand” from investors in the US since their respective launches in May 2020 and May 2022.

This article was previously published by Ignites Europe, a title owned by the FT Group.

The US-domiciled version of the JPMorgan US Equity Premium Income Active Ucits ETF (also known by the ticker JEPI) is the largest active ETF globally, while the JPMorgan Nasdaq Equity Premium Income Active Ucits ETF is “one of the fastest-growing active ETFs in the US”, according to JPMorgan AM.

Each ETF in the three-strong range “aims to offer investors consistent monthly income and appreciation potential from equity markets, with lower volatility, by combining active equity portfolios with index options to strike a balance across yield, capital growth and risk”.

The product suite uses an options strategy, whereby JPMorgan AM’s US core investment team led by Hamilton Reiner sells index options every week against the long-only equity portfolios of the three ETFs, using the premiums to generate income.

The premiums received from selling these call options are paid out monthly, in addition to the dividends received from the underlying equities held in each ETF.

JPMorgan AM, which manages $3.5tn in assets globally, said earlier this year that it aimed to increase ETF assets to $1tn within five years, more than six times the size of its ETF business of $160bn at the time.

Chief executive George Gatch said the growth of the ETF market was “one of the most fundamental changes” the industry was going through.

*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope.com