Accessing Current Income and Low Volatility

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.
Total Returns

(Note: Second in a series of the biggest actively managed ETFs)

The JPMorgan Ultra-Short Income ETF (BATS:JPST) is an exchange-traded fund (ETF) whose aims are to maximize income and preserve capital through the use of U.S. dollar-denominated debt securities that have an effective duration of one year or less.

As an actively managed ETF, the fund does not need to depend on the weighting standards of an index. Instead, JPST’s managers can adjust the portfolio holdings to aid returns and to reduce risk.

Drawing on the formidable economic research that is going on at JPMorgan Chase, JPST’s managers have invested in fixed, variable and floating-rate debt in the form of corporate issues, asset-backed securities, U.S. government debt and mortgage-related debt. Not surprisingly, most of JPST’s assets are concentrated in the U.S. banking sector, although foreign-issued debt sometimes appears in the portfolio.

Some of this fund’s top holdings include the U.S. Dollar (11.68%), JPMorgan Trust II US Government Money Market Fund Institutional (4.47%), Federation des caisses Desjardins du Quebec 2.25% 30-OCT-2020 (0.93%), Toyota Motor Credit Corporation 1.15% 26-MAY-2022 (0.86%), DNB Bank ASA 2.125% 02-OCT-2020 (0.79%), Fixed Income (Unclassified) (0.76%), U.S. Bank National Association FRN 21-JAN-2022 (0.74%) and BPCE SA FRN 14-JAN-2022 (0.68%).

This fund’s performance has risen after the recent market slide. As of May 21, JPST has been up 0.67% for the past month and 0.24% for the past three months. It is currently up 0.63% year to date.

Chart courtesy of www.stockcharts.com (accessed on May 27, 2020)

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The fund has amassed $11.07 billion of assets under management and has an expense ratio of 0.18%.

In short, while JPST does provide an investor with a chance to profit, actively managed ETFs may not be appropriate for all portfolios. Thus, interested investors always should conduct their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

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