JPMorgan Chase & Co. (JPM)'s J.P. Morgan Asset Management unit added its second new exchange-traded fund this week with the debut of the firm's first fixed income ETF on Thursday.
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The JPMorgan Disciplined High Yield ETF (NYSE: JPHY) is actively managed. JPHY holds only dollar-denominated high-yield credit of U.S. and foreign issuers.
More About JPHY
The fund is run by a seasoned and well-resourced high yield investment team with over $35 billion in AUM. Each of the senior managers has more than 20 years of experience navigating multiple market cycles, said New York-based JPMorgan Asset Management in a statement.
The debut of JPHY follows the launch of the JPMorgan Diversified Alternatives ETF (NYSE: JPHF), a hedge fund strategy ETF, on Wednesday. JPHF features a long/short equity strategy as well as an event-driven strategy designed to benefit from catalysts that could affect future share prices, including merger arbitrage opportunities. The new ETF also features a global macro strategy that can tap multiple asset classes, including equities, fixed income, currencies and commodities.
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With interest rates at historically low levels high yield investments offer increased income potential with lower rate sensitivity and reduced correlations to U.S. Treasuries. However, the high yield universe includes segments where risk has not been rewarded with commensurate return.
The Appeal Of 'Junk'
JPHY provides high yield exposure by systematically excluding securities that exhibit what may be considered unattractive risk-reward profiles. The result is a low-cost solution seeking higher risk-adjusted returns and lower credit risk relative to existing passive options, added JPMorgan Asset Management.
Junk bond ETFs have been popular with investors this year as oil prices have rebounded and the Federal Reserve has consistently held off on raising interest rates.
JPHY charges 0.4 percent per year, or $40 on a $10,000 investment.
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