ETF Education and Insights - J.P. Morgan Asset Management
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ETF Education and Insights

Explore insights into an evolving investment landscape and the explosive growth of a new investment vehicle, the Exchange Traded Fund (ETF).

Build your ETF foundation

Each day, more and more investors are discovering ETFs. What are ETFs? How do they work? We’ll answer your questions to help you make more informed decisions and the most of your investments.

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Percentage of portfolios invested in ETFs


 

Source: Charles Schwab, 2017 ETF Investor Study. Shown for illustrative purposes only.

The Evolution of ETFs

The early years

The earliest ETFs tracked traditional market cap-weighted indexes and are still among the most commonly used today. At first, they invested mainly in large U.S. stocks but have since expanded to also cover international stocks, bonds and other asset classes.

The first evolution

Like the first ETFs, strategic beta also tracks an index, but the index isn’t market cap-weighted and often represents a subset of a larger investment universe. These strategies often seek higher returns and/or lower risks than traditional indexing.

The latest evolution

Active ETFs rely on investment professionals to pursue a specific outcome — for example, generating income, outperforming a passive index or reducing risk.

More about the different types of ETFs
Active ETFs: Capturing research insights and manager expertise


 

Source: J.P. Morgan Asset Management. Shown for illustrative purposes only.

Advanced Investing Topics

Disclosures

This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

Investing involves risk, including possible loss of principal. Shares are bought and sold throughout the day on an exchange at market price (not NAV) through a brokerage account and are not individually redeemed from the fund.

International investing involves a greater degree of risk and increased volatility. Changes in currency exchange rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns. Also, some overseas markets may not be as politically and economically stable as the U.S. and other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and decreased trading volume.

There is no guarantee the funds will meet their investment objective. Diversification may not protect against market loss. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve.