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JPMorgan announced today the launch of a new series comprising four exchange traded funds (ETFs) based on the sub-indices of JPMorgan’s European Monetary Union Government Bond Index (GBI EMU) on NYSE Euronext’s European market. The new ETF series provides investors with direct access to the performance of the European fixed income bonds with specific maturities and follows the successful listing of the JPMorgan ETF GBI EMU Fund in October 2007.
Thierry Marcolivio, Head of Structured Funds for JPMorgan in France, said: “This new series of ETFs has been developed in response to a clear demand from clients for investment tools that give exposure to bonds with specific maturities. Investors can now access the performance of the leading European government bond indices in a simple and effective way, tailoring their choices according to specific investment strategies”.
JPMorgan ETF GBI EMU 1-3 years is based on JPMorgan EMU Government Bond Index 1-3 years and, through a single transaction, provides investors with exposure to a basket of 50 European government bonds with a maturity comprised between 1 and 3 years.
Similarly, JPMorgan ETF GBI EMU 3-5 years, JPMorgan ETF GBI EMU 5-7 years and JPMorgan ETF GBI EMU 7-10 years are based respectively on JPMorgan EMU Government Bond Index 3-5 years, JPMorgan EMU Government Bond Index 5-7 years and JPMorgan EMU Government Bond Index 7-10 years and provide exposure to baskets of 44, 32 and 42 European government bonds, with a maturity comprised between 3 and 5 years, 5 and 7 years and 7 to 10 years respectively.
The products are passively managed benchmark trackers and will replicate the performance of the JPMorgan GBI EMU sub indices, providing investors with direct access to the performance of the European fixed income market.
The products will be listed and traded on NextTrack, the Euronext segment dedicated to ETFs, an industry leader in ETF listings and trading.
Pedro Fernandes, Senior Manager, Head of ETFs, European Cash Market, NYSE Euronext, said: “We are delighted to welcome this new JPMorgan initiative that allows us to enlarge our offer of ETFs based on bond indices. With this introduction, we now have 308 ETFs listed on Next Track, including 80 registered since the beginning of this year. ETFs are attractive investment products for all types of investors. Among numerous advantages, they are flexible, transparent and more cost-efficient than other traditional funds”.
Since the launch of the JPMorgan EMU GBI Index in 1998, the index has been broadly recognised as one of the flagship benchmarks for the European fixed income market. It includes regularly traded fixed rate domestic government bonds issued by countries which use the Euro as the official currency including: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal and Spain. The countries are weighted by market capitalisation. Total returns for each of these markets are calculated, providing a relative measure of their performance. The index and its sub indices are also rebalanced monthly to satisfy the composition rules for the underlying instruments.
JPMorgan ETF GBI EMU 1-3 years, JPMorgan ETF GBI EMU 3-5 years, JPMorgan ETF GBI EMU 5-7 years and JPMorgan ETF GBI EMU 7-10 years are French fonds communs de placement, UCITS III compliant. The ETFs are managed by J.P. Morgan Structured Fund Management (JPM SFM), a French management company fully owned by JPMorgan, active in structured fund management and located in several European jurisdictions. J.P. Morgan Securitites Ltd will act as market maker for the product and provide the liquidity on Euronext Paris.
