JPMorgan, begun trading 2 new Multi-Factor Hedged Equity ETFs, the JPMorgan Diversified Return International Currency Hedged ETF (NYSE Arca: JPIH) and the JPMorgan Diversified Return Europe Currency Hedged ETF (NYSE Arca: JPEH) on Monday, April 4, 2016. Here is a synopsis of the new ETFs:
1.
FUND INFORMATION:
| Symbol: JPIH | Exchange: NYSE Arca |
| Name: JPMorgan Diversified Return International Currency Hedged ETF | Net Expense Ratio: 0.49% |
FUND OBJECTIVE:
The JPMorgan Diversified Return International Currency Hedged ETF seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed ex North America Diversified Factor 100% Hedged to USD Index.
Currently, the Fund seeks to achieve its investment objective by investing a substantial portion of its assets in the JPMorgan Diversified Return International Equity ETF (JPIN) (Underlying Fund), which is a passive fund investing in the same securities held in the Underlying Index, but the Underlying Fund does not include the currency hedge component. The Fund intends to enter into foreign currency forward contracts which may include both physically settled forward contracts and non-deliverable forward contracts (NDFs).
REFERENCE INDEX:
The FTSE Developed ex North America Diversified Factor 100% Hedged to USD Index has been developed to represent international stock performance with the foreign currency risk of the securities included in the Underlying Index hedged against the U.S. dollar on a monthly basis. The Underlying Index is comprised of equity securities from developed global markets (excluding North America) selected to represent a diversified set of factor characteristics, originally developed by the adviser. FTSE International Limited is the Index Provider.
Holdings in the Underlying Index are selected by the Index Provider primarily from the constituentsof the FTSE Developed ex North America Net Index, a larger FTSE index, which is comprised of large- and mid-cap equity securities in developed markets outside of North America. Through diversification, the Underlying Index is designed to more evenly distribute risk to minimize risk concentrations in regions and sectors. In the Underlying Index, weightings to regions and sectors are adjusted based on their historical volatility to diversify their contribution to the overall risk of the portfolio. The Underlying Index is diversified across certain countries in the following countries and/or regions:
United Kingdom, Europe ex United Kingdom, Japan, Pacific ex Japan, and across the following sectors: consumer services, consumer goods, financials, health care, industrials, materials, oil & gas, technology, telecommunications and utilities.
The rules based proprietary multi-factor selection process utilizes the following characteristics: relative valuation, price momentum, low volatility, and specific market capitalization.
The weightings to the individual characteristics are also adjusted based on each’s contribution to the overall risk of the portfolio. The Underlying Index’s securities are large- and mid-cap equity securities of companies from developed countries, including common stock, preferred stock and real estate investment trusts (REITs).
The Underlying Index applies a one month forward rate to the total value of the non-U.S. dollar denominated securities included in the Underlying Index to effectively create a “hedge” against fluctuations in the relative value of the currencies represented in the Underlying Index in relation to the U.S. dollar. The hedge is reset on a monthly basis.
As of January 31, 2016, the market capitalizations of the companies in the Underlying Index ranged from $911 million to $181.5 billion. The equity positions in both the Underlying Index and the Underlying Fund are rebalanced quarterly.
Underlying Fund’s Top 10 Holdings (04/07/16):
Symbol |
Name |
Weight |
| RDSA LN | ROYAL DUTCH SHELL PLC-A S | 1.08% |
| GSK LN | GLAXOSMITHKLINE PLC | 0.77% |
| BP/ LN | BP PLC | 0.65% |
| VOD LN | VODAFONE GROUP PLC | 0.63% |
| VOD LN | SAMSUNG ELECTRONICS CO LT | 0.62% |
| AZN LN | ASTRAZENECA PLC | 0.56% |
| WPP LN | WPP PLC | 0.53% |
| WKL NA | WOLTERS KLUWER | 0.52% |
| 015760 KS | KOREA ELECTRIC POWER CORP | 0.51% |
| NG/ LN | NATIONAL GRID PLC | 0.50% |
Underlying Fund’s Region Exposure (04/07/16):
| Asia Ex-Japan | 27.8% |
| Europe Ex-UK | 25.5% |
| UK | 22.4% |
| Japan | 22.4% |
Useful Links:
JPIH Home Page
Category: Equities>
2.
FUND INFORMATION:
| Symbol: JPEH | Exchange: NYSE Arca |
| Name: JPMorgan Diversified Return Europe Currency Hedged ETF | Net Expense Ratio: 0.49% |
FUND OBJECTIVE:
The JPMorgan Diversified Return Europe Currency Hedged ETF seeks investment results that closely correspond, before fees and expenses, to the performance of the FTSE Developed Europe Diversified Factor 100% Hedged to USD Index.
Currently, the Fund seeks to achieve its investment objective by investing a substantial portion of its assets in the JPMorgan Diversified Return Europe Equity (JPEU) (Underlying Fund), which is a passive fund investing in the same securities held in the Underlying Index, but the Underlying Fund does not include the currency hedge component.
The Fund intends to enter into foreign currency forward contracts which may include both physically settled forward contracts and non-deliverable forward contracts (NDFs).
REFERENCE INDEX:
The FTSE Developed Europe Diversified Factor 100% Hedged to USD Index has been developed to represent European stock performance with the foreign currency risk of the securities included in the Underlying Index hedged against the U.S. dollar on a monthly basis. The Underlying Index is comprised of equity securities from across developed Europe selected to represent a diversified set of factor characteristics, originally developed by the adviser. FTSE International Limited is the Index Provider.
Holdings in the Underlying Index are selected by the Index Provider primarily from the constituents of the FTSE Developed Europe Index, a larger FTSE index, which is comprised of large- and mid-cap equity securities in developed European markets.
Through diversification, the Underlying Index is designed to more evenly distribute risk to minimize risk concentrations in sectors. In the Underlying Index, weightings to sectors are adjusted based on their historical volatility to diversify their contribution to the overall risk of the portfolio. The Underlying Index is diversified across the following sectors: Consumer Goods, Consumer Services, Financials, Health Care, Industrials, Basic Materials, Oil & Gas, Technology, Telecommunications, and Utilities.
The rules based proprietary multi-factor selection process utilizes the following characteristics: valuation, momentum, and quality.
The Underlying Index’s securities are large- and mid-cap equity securities of companies from developed European countries, including common stock and preferred stock.
As of November 30, 2015, the market capitalizations of the companies in the Underlying Index ranged from $2.2 billion to $232.6 billion. The equity positions in both the Underlying Index and the Underlying Fund are rebalanced quarterly.
Underlying Fund’s Top 10 Holdings (04/07/16):
Symbol |
Name |
Weight |
| VOD LN | VODAFONE GROUP PLC | 2.39% |
| SAP GR | SAP SE | 2.36% |
| NOVN VX | NOVARTIS AG-REG | 1.98% |
| IBE SM | IBERDROLA SA | 1.98% |
| SCMN VX | SWISSCOM AG-REG | 1.98% |
| GSK LN | GLAXOSMITHKLINE PLC | 1.93% |
| ROG VX | ROCHE HOLDING AG-GENUSSCH | 1.74% |
| ERICB SS | ERICSSON LM-B SHS | 1.39% |
| NG/ LN | NATIONAL GRID PLC | 1.37% |
| NOVOB DC | NOVO NORDISK A/S-B | 1.33% |
Underlying Fund’s Country Exposure (04/07/16):
| UK | 25.6% |
| France | 14.1% |
| Germany | 11.8% |
| Switzerland | 11.9% |
| Sweden | 7.4% |
| Spain | 7.2% |
| Netherlands | 4.6% |
| Finland | 4.1% |
| Italy | 3.0% |
| Denmark | 3.0% |
Useful Links:
JPEH Home Page
Category: Equities>