Institutional Investors

JPMorgan: What Advisors Want From ETFs

Jillian DelSignore is Head of ETF Distribution for J.P. Morgan. Previously, she was a Director in the iShares unit of Blackrock, and prior to that worked at Goldman Sachs and Federated Investors.

Q3 hedge fund letters, conference, scoops etc

She is a graduate of John Carroll University and the University of Pittsburgh Katz Graduate School of Business.

I spoke to Jillian at the Schwab IMPACT conference on October 30 in Washington, DC.

Institutional Investors

mohamed_hassan / Pixabay

Tell me about your role at J.P. Morgan.

I am the head ETF distribution, and am responsible for everything distribution-related for the ETF business. I lead a team of 16 people who cover the advisor and institutional communities. We also cover the home offices of major brokers and that’s a growing part of the team – from one to two people. Doubling the size of the team as that part of the business becomes just meaningfully important to what we do day-to-day.

What are some of the common concerns you’re hearing from advisors related to ETFs?

They’re continuing to look and ask for product choice. Given where J.P. Morgan sits within this ecosystem, we’ve really worked hard to bring our investment capabilities to the ETF Industry. We are helping to offer the next chapter of ETFs.

If you look at the way we’ve built our product lineup, we’ve done it in such a way that it brings product choice to market. We built the lineup the way you build a portfolio, starting with equities, fixed income and alternatives. Across investment capabilities, we offer ETFs that are market-cap weighted, factor-based and active. We were deliberate in the way that we built that out to provide that product choice to advisors, because one of the things we’re hearing a lot here at this conference and in general, is related to portfolio construction.

It’s no longer just about how an ETF is constructed or what is its exposure. It’s what it is going to do if I put it into my portfolio. How does that impact the way my portfolio looks? We’re trying to help advisors think about portfolio construction and diversification, particularity now in a rising rate environment where we’ve seen increased volatility and uncertainty in the fixed-income market.

One of the products you’re introducing is a short-term fixed-income municipal ETF. What was the driver of that decision?

We actually have two short-duration products.

JPST is our ultrashort duration taxable bond ETF. That was launched in May of last year. It started at about $100 million in assets. Today it sits at $3.2 billion. That is 2,800% growth. That it is not a typo. We are very excited about that. It’s been a really unique product and advisors are looking for two things in fixed income. One is an opportunity to earn more on money that they have sitting in cash. This is not a cash product, but for those who are willing to take that step out from cash in order to earn a little bit more, it’s been a great solution. But then it is also a way to pull in duration. You can capture 75% of the yield of the AGG with 8% of its duration.

You’re able to capture significant yield for a fraction of the duration.

That has led to some additional fixed income product development. You mentioned our ultra-short municipal product. We were often getting the question about whether we have something on the municipal side. We’ve been able to leverage our existing municipal capabilities at J.P. Morgan.

We manage billions of dollars of municipal assets and used that team to build out this ultra-short product. It just launched a couple of weeks ago, so the assets are still in their infancy. But we have seen significant interest in the product.

Read the full article here by Robert Huebscher, Advisor Perspectives

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