JPMorgan Asset Management is preparing to make hedge fund strategies available to the man on the street in the UK and Europe with the launch of a new suite of actively-managed exchange-traded funds.
The US fund manager is to launch strategies run by its €2.3bn alternative beta fund, which include event-driven and macro investing, as single-strategy ETFs in Europe.
JPMorgan, which confirmed the plans, has been boosting its non-US ETF business this year, hiring the former European head of Invesco’s $110bn Powershares business, Bryon Lake, in March to lead the international expansion.
The new ETFs will be available to the private client and retail market, and will provide an option for investors who are unable to access hedge fund strategies due to their high fees and the onerous due-diligence process involved in selecting a manager.
The products will be managed by Yazann Romahi, chief investment officer for quantitative beta strategies. Romahi launched the alternative beta fund, JPMorgan Funds – Systematic Alpha Fund, in July 2009.
Lake said that the firm is in very preliminary stages of exploring options for ETF product development and asserted that hedge fund strategies were one of several different offerings under consideration.
Plans for the European launch come as JPMorgan pushes to expand its beta strategies platform in the region and follows the September launch of JPMorgan’s first actively-managed ETF in the US – the Diversified Alternatives ETF.
According to JPMorgan’s website, the US ETF offers “direct, diversified exposure to hedge fund strategies” through a “bottom-up, rules-based approach”. It provides hedge fund exposure to investors across equity long/short, event-driven and global macro strategies, and returned 4.48% between inception and March 31, the most recent figures available.
A spokesperson said JPMorgan’s long-term plan “is to build a full-scale, global strategic and alternative beta ETF capability to serve the needs of clients globally”.
They added: “Having initially focused our efforts in the US, expansion on a European Ucits platform represents a logical next step for broader international distribution. This expansion will include making our alternative beta capabilities available to European investors in ETFs.”
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