JP Morgan launches active ETFs driven by data science
Aug 13th, 2024 |
By James Lord, CFA |
Category: Latest news
JP Morgan Asset Management has launched a new suite of actively managed US equity ETFs that utilize data science to build fundamentally selected portfolios.
Data science is a multidisciplinary approach that focuses on extracting valuable insights from complex data sets.
Listed on the Nasdaq Stock Exchange, the JPMorgan Fundamental Data Science ETF Suite comprises three ETFs at launch, each targeting a different market capitalization segment of the US stock market.
The JPMorgan Fundamental Data Science Large Core ETF (LCDS US), JPMorgan Fundamental Data Science Mid Core ETF (MCDS US), and JPMorgan Fundamental Data Science Small Core ETF (SCDS US) come with expense ratios of 0.30%, 0.35%, and 0.40%, respectively.
Data science is a multidisciplinary approach that focuses on extracting valuable insights from complex data sets. It combines principles and practices from the fields of mathematics, statistics, artificial intelligence, and computer engineering.
JP Morgan employs custom techniques to analyze a wide variety of stock market information including company financial statements and decades of proprietary fundamental research. The firm then combines insights derived from these sources to forecast the financial prospects of each security, seeking to identify those that are favorably priced relative to their associated levels of risk.
The ETFs’ investment managers then construct portfolios aimed at maximizing expected returns while controlling for key risks to the underlying businesses. These risks include sensitivity to changes in macroeconomic conditions, competitive risks from existing companies or new entrants, and operational risks related to the companies’ business models.
JP Morgan continuously evaluates the efficacy of the information sources used within the investment process and seeks to identify new data sources that will enhance its forecasts and portfolio construction.
Jonathan Sherman, Head of the US Equity Investment Specialist Team at JP Morgan Asset Management, commented: “The launch of the JPMorgan Fundamental Data Science ETF Suite marks a key step in our active ETF strategy as we implement a fundamental approach to navigate today’s complex markets. By combining advanced data science capabilities with our experienced investors and robust risk management, we aim to deliver outcomes that help clients reach their financial goals with confidence.”