Recently, Bryon Lake, Head of ETFs at Americas, was named Global Head of ETF Solutions at J.P. Morgan Asset Management. Lake will drive asset management’s global ETF efforts in this newly expanded role, building new products and managing the existing product line. Additionally, Lake and the ETF product development team will be closely aligned with asset management’s global product development team to ensure an efficient development process across all types of investment vehicles.
ETF Trends had the opportunity to speak with Lake about his new role and about serving as a key public figure for J.P. Morgan’s ETF business.
ETF Trends: How has JP Morgan’s approach to ETFs been different from other ETF providers?
Lake: Investor behavior has changed rapidly over the past decade, with investors increasingly adopting the ETF wrapper. Because we have a broad range of strategies across asset classes, we generally have in-house capabilities to meet any objective. As we have strength in active management, we are working to deliver the best of our active capabilities through the ETF wrapper. We think this is a real differentiator for J.P. Morgan.
J.P. Morgan now has over 14 active ETFs across equity and fixed income, with a total of $30 billion in active ETF AUM. These products have been very well received by clients. We’re also pending approval on four active mutual funds being converted to ETFs in the first half of next year, another example of how we can tap into our existing capabilities to meet new investor needs. And, our scale allows us to be competitive on cost — with these proposed conversions, we have also proposed lowering the expense ratios, making them increasingly attractive.
ETF Trends: What are a few of your most popular ETF strategies today?
Lake: Our platform is in expansion mode, but we have definitely had some clear winners over the past couple of years. On the equity side, some of the most popular funds have been JP Morgan Equity Premium Income (JEPI), which generates income through a combination of selling options and investing in U.S. large-cap stocks, and JP Morgan ActiveBuilders Emerging Markets Equity ETF (JEMA), which delivers our industry-leading EM platform through an ETF.
On the fixed income side, we’ve leveraged our deep active fixed income expertise to launch ETFs well suited for current client needs, JP Morgan Ultra-Short Income (JPST), JP Morgan Ultra-Short Municipal Income (JMST), and JP Morgan Short Duration Core Plus (JSCP).
ETF Trends: After 30 years of declining interest rates, are more advisors looking for alternative income strategies? How would you guide them?
Lake: Income is a consistent theme across our platform and continues to be front of mind for investors. With rates stagnant, investors are searching for alternative strategies. JEPI, in particular, has addressed this need very directly. With a dividend yield of 7.1%, it is being deployed in a variety of ways in investor portfolios. We also see investors manage duration in their portfolios, which has raised our standing in the ultra-short space with JPST and JMST. If you want a different take JSCP, our short duration core plus ETF, which has a long track record as a mutual fund, is very attractive.
ETF Trends: What’s the outlook for continued JP Morgan ETF growth?
Lake: We are really excited about our overall asset management strategy of delivering our industry-leading active capabilities across asset classes through the ETF vehicle. We’ve experienced a lot of growth and increasing investor demand in the past couple of years and will continue on this path. Of course, we also continue to provide passive products where we can meet significant demand as well.
ETF Trends: Congratulations on your new role as Global Head of ETFs for JP Morgan. What are some of your top priorities?
Lake: Thank you. The global ETF team is so excited to be working closely with investors to give them the tools they need to build better portfolios. We’ve seen what can happen when our world-class investment strategies are delivered through the ETF vehicle. We also want to lend our voice to the overall ETF industry, educating around active ETFs and the benefits of ETF technology to investor portfolios. There is unlimited opportunity to deliver ETFs that investors will want, and because of our history, experience, and broad capabilities, we have an advantage in that we can generally meet any need by tapping into existing capabilities versus building from scratch. This allows us to be nimble and launch quickly, which has been an asset to the growth of our suite.
Our range of active ETFs is designed to help investors get the outcomes they are looking for, in increasingly complex markets, with simplicity. We strive to be the most trusted ETF provider, delivering our investment capabilities through whichever wrapper best suits investors. We will be relentless in delivering the best of J.P. Morgan through the ETF wrapper for our global client base.
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