J.P. Morgan ETFs ANOTHER REASON TO PARTNER. ANOTHER WAY TO BENEFIT FROM OUR INVESTMENT THINKING.

Transcription

1 J.P. Morgan ETFs ANOTHER REASON TO PARTNER. ANOTHER WAY TO BENEFIT FROM OUR INVESTMENT THINKING.

2 EXCHANGE-TRADED FUNDS ARE CHANGING THE WAY THE WORLD INVESTS and have quickly become one of the most popular investment vehicles. As ETFs evolve from their passive beginnings to a wide-ranging spectrum of strategic beta and more active strategies and methodologies, J.P. Morgan has entered the market to provide the investment expertise and thoughtful solutions ETF investors need now more than ever. With world-class investment management capabilities and the resources of a global financial leader, J.P. Morgan is committed to helping shape the future of ETFs and providing comprehensive investment solutions to advisors and their clients.

3 The ETF landscape EPIC EXPANSION OF ASSETS AND STRATEGIES ETFs are one of the fastest growing segments of the investment industry. In just two decades, investors propelled U.S. ETF assets to $1.7 trillion at the end of 2013, and Cerulli Associates, a financial services research firm, projects the U.S. market will surpass $4 trillion by ETF strategies have also evolved from traditional index-tracking to more sophisticated approaches, including widely varying strategic beta strategies and ETFs with full active management. More than half of institutional decision makers report that they will increase their use of strategic beta ETFs over the next three years, 2 and actively managed ETFs are entering the market at an increasing rate. With their tax advantages, cost efficiencies and intraday liquidity, ETFs have made believers of many financial advisors, who are now selecting the vehicle as a core allocation, a complement to existing positions, or as geographical equity diversification for client portfolios that are overweight U.S. markets. As the ETF market evolves and investor demand for the newest thinking and strategies grows, the need for expert guidance grows as well. In an effort to meet this need, and to help advisors meet the comprehensive portfolio needs of their clients, J.P. Morgan has entered the ETF space, bringing our wealth of asset management expertise and the vast resources of a leading global asset manager. MARKET SIZING OF ETF ASSETS (AUM $MM) 1 66 Retail Institutional ,006 1, ,333 $4 Trillion 1, WHAT IS STRATEGIC BETA? Strategic beta lives in the middle of the active-to-passive spectrum. It represents index-based investments that track non-traditional benchmarks that have an active element to their methodology. They typically seek to improve performance relative to a traditional market capitalization weighted index or alter the level of risk relative to a standard benchmark. Morningstar Advisor, The Strategic Factor of Smart Beta, April 10, Cerulli Associates The State of U.S. Retail and Institutional Asset Management 2012 and Exchange-Traded Fund Markets 2013, and Strategic Insight; data as of October 31, Note figures represent only ETFs; excludes ETCs and ETNs; data for 2013 is through October The Evolution of Smart Beta ETFs, Cogent Research. J.P. MORGAN ASSET MANAGEMENT 2

4 J.P. Morgan ETFs ANOTHER WAY TO ACCESS OUR UNIQUE CAPABILITIES For generations, J.P. Morgan insights have been helping investors turn market opportunity into investment performance. As one of the largest, most respected financial institutions and a leading global asset manager, J.P. Morgan now brings the same depth of resources, insights and expertise to ETFs. Sophisticated investment expertise Engineering next-generation ETFs demands deep expertise and sophisticated techniques to accomplish investor goals. With 250 investment strategies spanning all asset classes, investment styles and market segments, and a network of 750 investment professionals around the world, we are built to utilize our experience and insights to create and manage leading solutions for advisors and their clients. Long history of innovation From proprietary solutions to first-in-class thought leadership platforms like Market Insights, J.P. Morgan Asset Management has always led with its dedication to innovation through applied knowledge. Through the years, our thoughtful, rigorous process has resulted in the creation of unique investment approaches, such as the earliest target date funds and the evolved concept of a retirement glide path. As more advisors seek better risk-adjusted returns and alpha through ETFs, J.P. Morgan is committed to delivering the same expertise once reserved for the world s largest institutions and most affluent individuals to investors everywhere through J.P. Morgan ETFs. Proprietary research and thought leadership Our fully integrated research platform delivers deep, original insights that typically drive exceptional investment performance across funds, institutional accounts and now ETFs. THE SAME RESOURCES AND INSIGHT FOR WHICH J.P. MORGAN IS KNOWN ARE NOW CREATING A UNIQUE APPROACH TO ETF MANAGEMENT. 3 J.P. MORGAN ETFs

5 A thoughtful approach A FULL RANGE OF ETF SOLUTIONS FROM J.P. MORGAN J.P. Morgan is taking a dedicated, long-term approach to ETF management. We are laying the groundwork for a full range of strategic beta and other innovative ETF solutions. Over time, our offering will include strategies to complement existing J.P. Morgan mutual funds. Our entry into the space begins with a geographically diverse core equity suite of ETFs called the Diversified Return ETFs. JPGE seeks global equity returns with reduced volatility by diversifying across regions, sectors and multiple factors value, size, momentum and low volatility. It seeks to track the FTSE Developed Diversified Factor Index, created in partnership with J.P. Morgan, which measures risk-adjusted returns by combining the four factors within a systematic risk framework designed to enhance the consistency of returns. As the first offering from the Diversified Return suite of ETFs, J.P. Morgan has launched the JPMorgan Diversified Return Global Equity ETF (JPGE), the next generation of strategic beta ETFs. Designed to be the foundation of a global equity portfolio, the multi-factor fund addresses the challenge of keeping clients invested in equities during market volatility. JPGE ETF ADVANTAGES JPGE addresses key deficiencies inherent to traditional market-cap index strategies, namely exposure to excessive risk concentrations (i.e., asset bubbles) and systematic bias toward overvalued securities. SEEKS BETTER RISK-ADJUSTED RETURNS Combining multiple factors and risk budgeting systematically reduces exposure to unrewarded risk, significantly improving Sharpe Ratio versus a market-cap weighted index. PURSUES SMOOTHER INVESTOR EXPERIENCE Robust risk diversification across regions and sectors, and exposure to multiple factors, systematically reduces portfolio volatility, helping investors stay invested through market ups and downs. J.P. MORGAN ASSET MANAGEMENT 4

6 Asset management experience J.P. MORGAN A NATURAL LEADER Beyond shaping new strategic beta strategies, J.P. Morgan expertise will also focus on creating and launching new and innovative solutions for the next phase of ETFs. A legacy of active asset management experience naturally positions J.P. Morgan to help shape the future of ETFs. Guiding financial advisors and investors through changing markets is our core competency, and one which has driven superior and consistent returns for clients for more than 150 years. The next generation of ETFs entails sophisticated strategies that require an investment manager with a deep research platform and experience capturing alpha. J.P. Morgan will provide that expertise, leveraging our market leadership and strong investment performance in asset management to deliver ETF solutions. GLOBAL INVESTMENT EXPERTISE WORLD-CLASS TENURED PORTFOLIO MANAGERS ACTIVELY SEEKING INVESTOR SUCCESS RESEARCH- DRIVEN INFORMATION ADVANTAGE AS A LEADING ASSET MANAGER, J.P. MORGAN BRINGS CONSIDERABLE EXPERIENCE AND SKILL TO PROGRESSING THE NEXT GENERATION OF ETFs. UNRELENTING FOCUS ON RISK MANAGEMENT MARKET LEADERSHIP OF GLOBAL ASSET MANAGER 5 J.P. MORGAN ETFs

7 J.P. MORGAN IS COMMITTED TO DELIVERING WORLD-CLASS INVESTMENT PERFORMANCE through a broad range of ETF strategies. By combining the unique features of the ETF structure with our insights, resources and active management capabilities, J.P. Morgan will bring a truly differentiated experience to advisors and investors. To learn more about our new suite of Diversified Return ETFs, including the JPMorgan Diversified Return Global Equity ETF (JPGE), please contact your advisor.

8 Investors should carefully consider the investment objectives and risks, as well as charges and expenses of the fund before investing. The prospectus contains this and other information about the fund. Read the prospectus carefully before investing. Call JPM-ETF or visit to obtain a prospectus. Investing involves risk, including possible loss of principal. Shares are bought and sold at market price, and are not individually redeemed from the fund. Brokerage commissions will reduce returns. 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 United States and other nations. The fund uses derivatives, which may be riskier than other types of investments and may increase the volatility of the fund. The fund may not track the return of its underlying index for a number of reasons, such operating expenses incurred by the fund that are not applicable to the index, and the time difference between calculating the value of the index and the net asset value of the fund. There is no guarantee the funds will meet their investment objective. Diversification may not protect against market loss. J.P. Morgan Exchange-Traded Funds are distributed by SEI Investments Distribution Co., which is not affiliated with JPMorgan Chase & Co. or any of its affiliates. J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc. JPMorgan Chase & Co., September CONTACT YOUR ADVISOR TODAY JPM-ETF ( ) jpmorganetfs.com