Jon Maier’s shop has recently been making headlines for its management of the JPMorgan Equity Premium Income ETF (JEPI) & the JPMorgan Ultra-Short Income ETF (JPST). These two funds have become some of the world’s largest actively managed exchange-traded funds. Investors are in an uncertain, volatile, awkward market. For those that would like to remain invested but reduce risk, these funds offer a compelling strategic alternative.
The JPMorgan Equity Premium Income ETF seeks to deliver an attractive income stream combined with some downside principal protection. This year has been nearly a flat line to date. As of Thursday’s market close, it was still down about 4%—a striking performance compared to the nearly 5% decline (5% and counting!) in the S&P 500. The JPMorgan Ultra-Short Income ETF seeks short-term, high-quality fixed income investments. It appeals to investors that like the stability of a bond, but like to invest conservatively.
Maier’s firm has shot to the forefront of the rapidly growing ETF category. According to VettaFi, its funds rank top three in size worldwide. Such a high profile reflects a deep demand for risk management strategies in today’s financial environment.
“It provides a ballast in your portfolio [and] stability for those investors that are looking to protect principle.” – Jon Maier
Especially during periods of increased volatility, the JEPI fund can be especially helpful. Maier noted that higher volatility, as measured by the VIX index, can lead to larger income-generating prospects for investors. In volatile environments, the fund’s strategy of shorting out-of-the-money options protects against potential downside through upside participation in the underlying portfolio.
Mike Akins from ETF Action highlighted the ongoing demand for these ETFs, stating, “This category is where people are hiding out to weather the storm.” A lot of investors have been looking for less risky investment vehicles due to today’s economy. Consequently, JEPI and JPST have become popular alternatives.
Even the most risk-averse investors know how to maneuver through a roller coaster market with poise. The JPMorgan ETFs provide invaluable tools to keep them engaged and hunt for quality, stability and income. After all, Maier’s firm manages $800 million in assets and uses market-based strategies to earn income. So, collectively, they still serve to meet a critical investment demand.
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