JPMorgan Asset Management has converted an existing mutual fund offering exposure to the S&P 1000 into an ETF wrapper.
The JPMorgan Market Expansion Enhanced Equity ETF (JMEE), incepted in 1998 as a mutual fund and garnered $938 million in assets under management, debuted in its new ETF wrapper on the NYSE on May 9.
“Asset managers are able to keep the active fund’s track record in tact and benefit from the scale of the preexisting asset base when they convert from a mutual fund to an ETF,” Todd Rosenbluth, head of research at ETF Trends and ETF Database, said. “While such moves do not make sense for all mutual funds, we likely will see more conversions in the future.”
JMEE seeks to provide investment results that correspond to or incrementally exceed the total return performance of the S&P 1000 Index that tracks the performance of the small- and mid-capitalization equity markets, according to regulatory filings.
Under normal circumstances, the fund will hold at least 80% of its assets in stocks in the index. The index is an index that includes stocks of small- and mid-capitalization companies. According to regulatory filings, the fund may use futures contracts to gain or reduce exposure to its index, maintain liquidity, and minimize transaction costs.
Additionally, the ETF has an initial expense ratio of 0.24%.
This conversion is the second of four mutual funds that the firm began changing last year. The first conversion, the JPMorgan Inflation Managed Bond ETF (JCPI), debuted in its new ETF wrapper last month.
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