It’s this combination of investment expertise and ETF know-how that sets our ETFs apart, allowing us to track indexes more efficiently, and provide competitively priced access to new opportunities through the development of innovative active, strategic beta and index strategies.
EUR INVESTMENT GRADE CORPORATE BONDS
- Generating positive alpha via security selection: Passive investment grade credit offerings might underperform the benchmark net of fee. Our process looks to replicate the benchmark from a duration and sector perspective however, by utilising fundamental research the process seeks to add alpha, helping offset fees and deliver modest outperformance of the benchmark.
- Changing Compositions: Credit quality within the IG corporate market has deteriorated since 2008–09: Lower quality BBB rated issues now account for a considerably larger share of the sector, and leverage for these issuers has increased. Investors in passive strategies designed to closely track a debt-weighted IG corporate index are likely being forced to hold a greater percentage of these now more highly leveraged BBB issuers. An active approach may help avoid uncompensated risks.
- Avoiding downgrades: The benefits can be most pronounced during credit bear markets, where avoiding losers can be an important source of alpha versus benchmark. Active security selection can avoid the disruption typically associated with a fallen angel moving from IG to high yield.
JPM EUR Corporate Bond Research Inhanced Index (ESG) UCITS ETF
The Sub-Fund aims to achieve a long-term return in excess of Bloomberg Barclays Euro Corporate Index (the "Benchmark") by actively investing primarily in a portfolio of investment grade Euro denominated corporate debt securities.