Accessing Current Income and Low Volatility

(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)

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.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.