J.P. Morgan Asset Management (JPMAM) has launched its first fixed income multi-factor Ucits ETF in Europe. JPMorgan Global High Yield Corporate Bond Multi-Factor Ucits ETF (JGHY) is now available on the London Stock Exchange, Deutsche Börse Xetra and the Borsa Italiana.
JGHY is designed to track the J.P. Morgan Asset Management Global High Yield Multi-Factor index, a new rules-based index created by JPMAM's self-indexing unit based on research from the Quantitative Beta Solutions (QBS) team. The index selects issuers based on metrics like the quality of their balance sheet, current valuations, and recent price momentum, investing in a sub-set of the broader starting universe of Global High Yield Bonds.
The JPMAM index provides exposure to global corporate high yield markets, across developed and emerging markets, but will emphasise exposure to high yield securities which exhibit strong value, quality and momentum characteristics. Investing in a combination of securities with these characteristics intends to provide investors with a yield comparable to traditional debt-weighted bond indices.
The multi-factor approach also gives JGHY the potential to improve diversification, lower volatility and reduce exposure to the unrewarded risks that are inherent in traditional debt-weighted bond indices. JGHY will have a TER of 35 basis points.