By J.P Morgan Asset Administration
By J.P Morgan Asset Administration
As traders grapple with the continuing impacts of COVID-19, we’re seeing extra urge for food for yield however much less abdomen for threat. With charges down and volatility up, the Extremely-Quick Municipal Revenue ETF (JMST) affords a chance to ship tax-exempt earnings whereas actively managing credit score and length exposures.
It’s excessive time for low length
In concentrating on portfolio length of lower than one 12 months, JMST invests in ultra-short municipal bonds at a very favorable time for the asset class:
- Money charges prone to hover close to zero. The longer the Fed leaves charges unchanged, the better the necessity to pursue larger yields than money with out the upper dangers of long-term bonds.
- Yield curve stays flat. Investing alongside the entrance finish of the present curve permits us to generate related after-tax earnings as longer-dated points, with a fraction of the length threat.
- Tax-exempt yields are compelling. With tax reform a risk within the wake of COVID-19 and November elections, tax-exempt earnings could grow to be much more enticing going ahead.
- Elevated volatility is predicted to proceed. Our emphasis on high-quality, ultra-short municipals helps meet investor calls for for secure returns and low threat in unsure occasions. When markets bought off sharply within the first quarter of 2020, for instance, JMST delivered constructive outcomes.
Associated: Webcast – No Time for Passive: The Case for Energetic Muni Bonds
JMST is a completely lively resolution for 18 foundation factors*
Passive municipal bond ETFs are usually inefficient even in the most effective of circumstances. However with the pandemic now placing a premium on credit score analysis and bond choice, lively administration takes on added significance in uncovering alternatives and avoiding obstacles as they come up.
As a part of J.P. Morgan’s $70-plus billion municipal platform, JMST combines macro views with elementary evaluation and ESG concerns to create a bottom-up, value-driven funding course of. The result’s a conservative portfolio consisting primarily of investment-grade securities managed by skilled professionals, backed by profession analysts and priced beneath many passive friends.
Larger earnings? Decrease threat? Search each wants with JMST
- Step up from money to hunt larger earnings. Stepping out from money on the yield curve is a chance to each improve month-to-month earnings and benefit from lively investing within the broader ultra-short house.
- Step down from longer-term bonds to cut back threat. In in the present day’s unstable atmosphere, ultra-short methods might help cushion threat with out sacrificing yield potential.
Put together now for the street forward
As COVID-19 continues to reshape the funding panorama, our lively staff will monitor the consequences on municipalities and their bond points. As all the time, we’ll handle the ETF conservatively, pursuing returns from research-driven safety choice fairly than macroeconomic bets or passive market exposures.
Be taught extra about JPMorgan Extremely-Quick Municipal Revenue ETF (JMST) ►
JMST RISK SUMMARY – The chance of a municipal obligation typically is determined by the monetary and credit score standing of the issuer. Modifications in a municipality’s monetary well being could make it tough for the municipality to make curiosity and principal funds when due. Underneath some circumstances, municipal obligations may not pay curiosity except the state legislature or municipality authorizes cash for that function. Municipal obligations could also be extra prone to downgrades or defaults throughout recessions or related intervals of financial stress.
You might lose cash by investing within the Funds. As a result of the share worth of the Fund will fluctuate, if you promote your shares they might be value kind of than what you initially paid for them. The Fund could impose a price upon the sale of your shares or could briefly droop your means to promote shares if the Fund’s liquidity falls beneath required minimums due to market circumstances or different elements. An funding within the Fund will not be insured or assured by the Federal Deposit Insurance coverage Company or another authorities company. The Fund’s sponsor has no authorized obligation to offer monetary assist to the Fund, and you shouldn’t anticipate that the sponsor will present monetary assist to the Fund at any time.
Click on right here for JMST standardized efficiency
The efficiency quoted is previous efficiency and isn’t a assure of future outcomes. Funding returns and principal worth of an funding will fluctuate in order that an investor’s shares, when bought or redeemed, could also be value kind of than unique value. Present efficiency could also be larger or decrease than the efficiency knowledge proven. For efficiency present to the latest month finish please name 1-844-4JPM-ETF.
*Strange brokerage commissions apply.
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The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.