Hughes describes the reception his firm has received in the marketplace as “phenomenal.” The first two products launched by JPAM in Canada, Hughes notes, have been the best received. The JPMorgan US Equity Premium Income Active ETF (JEPI) and the JPMorgan Nasdaq Equity Premium Income Active ETF (JEPQ), both actively managed strategies with covered call option overlays, are the two largest JPAM products in Canada by AUM. As their product shelf has grown, though, Hughes has seen greater interest in other strategies.
For all their successes, Hughes notes there have been some lessons learned over the past year. He notes that the firm’s long-term focus in their strategies has sometimes meant focusing on areas like value which haven’t picked up the same momentum over the past 12 months. Nevertheless, they want to maintain the option of building a diversified portfolio with their products.
Hughes also notes the issue of currency risk that impacted some JPAM Canadian ETFs this year. Those strategies were all initially offered unhedged while tracking US assets. That currency dynamic impacted overall performance as CAD rallied against the USD. While a secular decline in the global reserve currency was something nobody predicted going into 2025, Hughes notes that new strategies are being rolled out with hedged and unhedged versions available.
The latest ETFs from JPAM are both income-related products the JPMorgan US Ultra-Short Income Active ETF (JPST) and the JPMorgan US Bond Active ETF (JBND) are the firm’s first Canadian-listed fixed income products. Hughes describes these products as another example of the firm’s strategy to take vehicles that work in other markets and Canadianize them.
This foray into fixed income, as well as the income components of their first Canadian ETFs, highlight what has sometimes been remarked upon as a trend in the Canadian investment landscape: a preference for income. Hughes notes that trend and highlights that the Canadian perceived preference for payouts is often presented as a pejorative. He argues, rather, that income plays a key role in total returns and that even some of the largest and most sophisticated institutions will prioritize cash flow in their strategies. He notes that income is a feature of Canada’s equity market, which skews towards dividend payers, and that investors who already know how useful investment income is will often be more favourably disposed to other income strategies.