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Trading active ETFs

Ways to trade active ETFs

Trading active ETFs is the same as trading passive ETFs. There are three methods: NAV trading; risk trading; and agency trading.

NAV Trading

is where the dealer and client agree to trade the ETF

at a price that is tied to its future net asset value per

share. The price is usually quoted as NAV plus or

minus basis points (bps).

Risk Trading

is a common alternative to NAV trading. It involves

the client requesting an intraday price from one or

more brokers that it can act upon immediately.

Investors can get price quotes any time during the

trading day. This method of trading may be

advantageous to clients looking to execute orders

quickly at one price.

Agency Trading

is where the client employs a broker to act on their

behalf in order to trade the ETF in the secondary

market (via the stock exchange or over the counter).

This method is similar in execution to risk trading.

The client, rather than the broker, bears the market

risk.

Ways to trade active ETFs

05-Trading active ETFs - Ways to trade active ETFs
Source: J.P. Morgan Asset Management. For illustration purposes only. The ETF aims to replicate the performance of an index however its market price can be different from its net asset value and from the net asset value of the index.
JP Morgan Asset Management

  • J.P. Morgan Mexico

  • JPMorgan Chase

This website is a general communication being provided for informational purposes only. It is educational in nature and is not designed to be a recommendation for any specific investment product, strategy, plan feature or purpose in any jurisdiction, nor a commitment from J.P. Morgan Asset Management or any of its subsidiaries to participate in any of the transactions mentioned herein. Any examples used in this website are generic, hypothetical and for illustrative purposes only. This material does not contain sufficient information to support an investment decision and should not be relied upon by you in evaluating the merits of investing in securities or products. In addition, users must perform an independent assessment of the legal, regulatory, tax, credit, financial and accounting implications and determine, in conjunction with their own professional advisors, whether any investment referenced in this document is considered appropriate for their personal objectives and profile of risk. Investors should ensure that they obtain all relevant information available before making any investments. All forecasts, figures, opinions or investment techniques and strategies established are for information only, based on certain assumptions and current market conditions and are subject to change without prior notice. All information presented in this document is considered accurate at the time of writing, but no assurance of accuracy is given and no liability is accepted with respect to any error or omission. It must be considered that the investments carry risks, the value of the investments and the income generated may fluctuate according to market conditions and tax provisions and that investors do not recover the principal invested in certain circumstances. Both performance and past performance are not reliable indicators of current and future results. The listing of the ETFs in the Sistema Internacional de Cotizaciones de la Bolsa Mexicana de Valores does not imply any certification as to the goodness of the securities, the solvency of the issuers or the accuracy or veracity of the information contained in the placement prospectuses and supplements, information, nor validates the acts which, if applicable, have been carried out in contravention of the law. J.P. Morgan Asset Management in México does not market or distribute the ETFs listed in this document. To purchase the product, investors should contact their broker / distributor directly, without the intermediation or involvement of J.P. Morgan Asset Management. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide.
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