JPMAM adds to premium equity ETF suite

J.P. Morgan Asset Management (JPMAM) has boosted its Equity Premium Income offering of exchange traded funds (ETFs) with the listing of the JPMorgan Global Equity Premium Income Complex ETF (JEGA) on the Australian Securities Exchange (ASX).

JEGA joins the existing ETFs part of JPMAM’s equity premium income suite, the JPMorgan Equity Premium Income ETF (JEPI) and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ), offering investors a steady and consistent income stream of seven to nine per cent annualised paid monthly.

Portfolio managers, Piera Elisa Grassi and Nicolas Farserotu, have leveraged JPMAM’s expertise in active equities and a 90-strong research team to develop a robust long-only approach with appreciation potential and lower volatility than its benchmark, the MSCI World Index.

The research, covering over 2,500 securities, informs the managers’ portfolio selections of small overweight positions in attractive names and small underweights in less attractive names to develop a diversified, high-quality and lower-beta portfolio.

“Investors continue to seek high levels of income, but they also want exposure to stock markets with less volatility,” Mark Carlile, Head of Wholesale – Australia & New Zealand, said.

“We have seen the rapid growth in our option overlay US equity strategies over the past couple of years, and we are delighted to bring a global equity version to join our equity premium income suite of products.

“Australian investors, who have long enjoyed dividend income from domestic equities, now have the opportunity to earn income from their international equity investments.

The ETF also has an options strategy applied by portfolio managers Hamilton Reiner, Judy Jansen and Matthew Bensen, where, according to JPMAM, they sell index options made up of the S&P500 and MSCI EAFE “against JEGA’s long-only equity portfolio and use the premiums to generate income opportunities.

“By selling call options every week, JEGA seeks to adapt to changing market conditions. That means when, for example, volatility spikes, JEGA has the potential to provide higher income when investors most need the cushion against fluctuating prices”.

“Together with JEPI and JPEQ, the launch of JEGA, adds another dimension to our already strong equity premium suite of strategies,” Andrew Creber, CEO of J.P. Morgan Asset Management Australia & New Zealand, said.

“For those who are seeking income, or income with lower volatility or simply to diversify their equity exposure, these objectives may be met by adding any one of these strategies or a combination of all three to a portfolio.”