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Winnipeg Free Press
a day ago
- Business
- Winnipeg Free Press
Actively managed but truly more profitable?
Opinion Negative consumer sentiment in Canada toward anything American-made has not stopped one of the world's largest investment managers from launching products north of the border. JP Morgan Asset Management, based in New York, recently introduced a new actively managed exchange-traded fund (ETF), specially designed to provide Canadian investors with access to its world-leading U.S. stock-picking managers. 'Actively managed ETFs are what we do well and that expertise is what we're bringing to Canada,' says Jay Rana, head of Canadian adviser business at J.P. Morgan Asset Management in Toronto. Part of the storied U.S. investment bank J.P. Morgan Chase, the asset manager oversees US$3.7 trillion, among largest money managers in the world. It recently brought a stock-picking strategy for the U.S. stock market to Canada in an ETF wrapper that doesn't even exist in that form in the U.S. 'It is truly a core U.S. equities position for investors' portfolio,' Rana says about the JPMorgan US Core Active ETF (JCOR). It is the fifth actively managed ETF launched in Canada in the last year by J.P. Morgan. Yet the others — JPMorgan U.S. Equity Premium Income Active ETF (JEPI), JPMorgan Nasdaq Equity Premium Income Active ETF (JEPQ), JPMorgan U.S. Growth Active ETF (JGRO) and JPMorgan U.S. Value Active ETF (JAVA) — all have U.S.-listed ETF twins, providing a track record of their performance. The new JCOR ETF, launched in June, has a mutual fund twin in the U.S — and its long-term history is impressive. Its JPMCB U.S. Active Core Equity Fund (the mutual fund version) has beaten its benchmark index, the S&P 500, over the last 15 years. Albeit, it has done so by a little more than a half-percentage point. Yet it is impressive all the same given the S&P Spiva Scorecard report on mutual fund performance shows more than 90 per cent of actively managed U.S. equity funds do not beat their benchmark over 10-year periods. Rana chocks up the performance to J.P Morgan's experience and size. 'At J.P. Morgan, we do have an advantage across a number of asset classes just as a result of our scope and reach.' Yet its recent launches of active ETFs is part of a larger trend. What was once almost strictly a passive product with low management fees, often a 10th of the cost annually of a similar mutual fund, the market is now seeing a wave of new active products, says Prerna Mathews, Mackenzie's vice-president of ETF product Strategy in Toronto. 'Active ETFs now make up almost 35 per cent of total assets under management of all ETFs in Canada,' says Mathews, noting Mackenzie is a Canadian leader in actively managed ETFs. Among those new funds on the market is the Mackenzie U.S. Low Volatility ETF (MULV) launched last year. 'The demand is there because a lot of advisers see these as better portfolio tools.' What's more, she notes active management could come in handy in the years ahead. Investors likely face many challenges: a volatile U.S. administration and ongoing trade strife, persistent inflation, swelling debt, environmental degradation and geopolitical unrest. As well, the U.S. market is highly overvalued. It remains heavily weighted to big tech stocks. As such, a passive strategy mirroring the S&P 500 performance will certainly benefit when big tech does well, as it has recently, but it will also fall with big tech, which dominates the market. Active management, according to one report by a top European active management asset firm, could help mitigate the many risks. Simply, active managers can navigate risks while seeking out opportunities a passive strategy can't, Rana says. 'Active management can assess and respond to complex risks and adjust portfolios in real-time,' he says. What's more, one of the knocks against active management strategies has been fee costs. Mutual funds run by active managers can charge, for example, two per cent per year for a U.S. stock market fund. Yet that fee often hinders performance. It is difficult to beat a broad-based benchmark like the S&P 500 when you're consistently two per cent behind. That said, its U.S. mutual fund version of J.P. Morgan's JCOR ETF did so well because its MER, or management expense ratio (average annual fee cost), is 0.4 per cent. The Canadian ETF, by the way, charges 0.44 per cent as an annual fee. Still, a Winnipeg portfolio manager specializing in ETF strategies for private clients is skeptical the growing trend of actively managed ETFs will benefit investors. 'I've heard the same argument for decades that passive ETFs may not work because of the environment we're in,' says Alan Fustey, portfolio manager with Bellwether Investment Management. The premise 'this time will be different' and active managers will rise to the challenge is constantly bandied about by the industry, but it rarely materializes consistently, says Fustey. That's simply because it is incredibly hard for even professionals to beat big, broad markets like the S&P 500 and the TSX Composite Index. With passive investing, you are just trying to capture the market performance for a low cost, today often less than 0.10 per cent. Wednesdays A weekly dispatch from the head of the Free Press newsroom. 'The reason it's so hard to outperform those indices is that everyday winners get marked up and losers get marked down,' he says. 'And no one can predict which shares are going to be the winners long-term and which ones will be the losers long-term.' Of course, don't expect the debate to die. But you can expect more active ETF launches, especially as investors fret about what lies ahead, Rana says. 'We believe active management can play a pivotal role in this environment.' Joel Schlesinger is a Winnipeg-based freelance journalist joelschles@
Cision Canada
16-06-2025
- Business
- Cision Canada
J.P. Morgan Asset Management Broadens Canadian ETF Offering with New Core Strategy
TORONTO, June 16, 2025 /CNW/ - J.P. Morgan Asset Management Canada (JPMAM) * has announced the launch of the JPMorgan US Core Active ETF (TSX: JCOR), further expanding its lineup of actively managed exchange-traded funds (ETFs) available to Canadian investors. JCOR has closed its initial offering of units and is now trading on the Toronto Stock Exchange. "The Canadian market continues to demand sophisticated investment solutions that help navigate shifting market dynamics," said Travis Hughes, Head of Canada at J.P. Morgan Asset Management. "JCOR reflects our commitment to delivering world-class active management by bringing Canadian investors a proven core strategy powered by one of the industry's most experienced investment teams." JCOR is built on the strength of J.P. Morgan Asset Management's global equity platform, which manages more than US$1 trillion in assets and is supported by one of the largest and most experienced fundamental research teams in the industry. The strategy draws on a team-based approach that integrates the insights of 18 dedicated research analysts, each averaging over 20 years of experience. This deep bench of talent and long-standing investment process reflects the firm's commitment to delivering consistent, long-term results through active management. "With the launch of JCOR, Canadian investors can now access a high-conviction, style-agnostic U.S. equity core strategy that captures the best of both growth and value styles," said Jay Rana, Head of Canadian Advisor Business at J.P. Morgan Asset Management. "This strategy is built on a time-tested process and offers a powerful solution for investors seeking to navigate changing markets with confidence." JCOR is designed to serve as a core holding within a diversified portfolio, offering investors a style-agnostic approach that combines the best of growth and value investing. The strategy emphasizes high-conviction stock selection grounded in deep fundamental research and supported by one of the industry's largest and most experienced investment teams. With this latest launch, JPMAM continues to broaden its Canadian ETF lineup with actively managed solutions built to navigate evolving market conditions. This latest offering builds on JPMAM's October 2024 debut in the Canadian ETF market with the JPMorgan US Equity Premium Income Active ETF (TSX: JEPI) and the JPMorgan Nasdaq Equity Premium Income Active ETF (TSX: JEPQ). In March 2025, the firm expanded its lineup with the JPMorgan US Value Active ETF (TSX: JAVA) and the JPMorgan US Growth Active ETF (TSX: JGRO), providing investors with access to distinct value and growth strategies. Each ETF reflects the firm's commitment and dedication to offering differentiated to Canadian investors, outcome-oriented solutions backed by institutional-grade expertise. With over 40 years of experience serving Canadian investors, J.P. Morgan Asset Management continues to grow its presence in the country. Additional product launches and strategic hires are planned in the months ahead. About J.P. Morgan Asset Management J.P. Morgan Asset Management, with assets under management of US$3.7 trillion (as of March 31, 2025), is a global leader in investment management. J.P. Morgan Asset Management's clients include institutions, retail investors, and high-net-worth individuals in every major market throughout the world. The firm offers global investment capabilities across equities, fixed income, real estate, hedge funds, private equity, and liquidity. Disclosures Commissions, trailing commissions, management fees and expenses may all be associated with ETF investments. Please read the prospectus before investing. ETFs are not guaranteed, their values change frequently, and past performance may not be repeated. This press release contains forward-looking statements with respect to JPMAM's Canadian market strategy. These statements are not historical facts but reflect JPMAM's current expectations regarding future events. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including, but not limited to, general economic and market factors. Although JPMAM believes the assumptions inherent in the forward-looking statements are reasonable, such statements are not guarantees of future performance. Readers are cautioned not to place undue reliance on forward-looking statements due to their inherent uncertainty. JPMAM undertakes no obligation to publicly update or revise any forward-looking statement, except as required by law. This press release is issued in Canada by JPMorgan Asset Management (Canada) Inc., which is registered as a Portfolio Manager and Exempt Market Dealer in all Canadian provinces and territories except the Yukon, and as an Investment Fund Manager in British Columbia, Ontario, Quebec, and Newfoundland and Labrador. J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. SOURCE: J.P. Morgan Asset Management Canada Legal entity in Canada: JPMorgan Asset Management (Canada) Inc.
