Everyone wants to ride the wave of ETFs (the trendy product on Wall Street). Business

The first exchange-traded fund (ETF) was launched in 1990. However, this passively managed product – it generally mimics indices – with low fees and liquidity of stocks – can be bought and sold in real time unlike traditional funds – Net Asset Value of the Day – 21st Century It did not begin to grow commercially until the first decade of the 1930s. And when he did, his growth was spectacular. Currently, these vehicles manage $12 trillion worth of savings and are forecast to reach $20 trillion in assets under management in 2027.

JP Morgan Asset Management wants to play a bigger role in this growing business. The U.S. bank manager started selling ETFs relatively late — it launched its platform in 2014 — and now has 113 exchange-traded funds with $164 billion in assets. “Our target is that within five years this figure will reach one trillion dollars,” the company’s CEO George Gach told reporters during the annual media event held in London last week and to which EL was invited. Country.

The main way for JPMorgan AM to grow into this market is, above all, through so-called active ETFs. These products have the same liquidity and pricing characteristics of regular ETFs, but they do not simply mimic the behavior of an index; Managers have a margin of discretion to be able to move the portfolio and, if they do it right, achieve additional profitability. “Our approach to risk is about helping clients navigate turbulent times. And we focus it on active management. Uncertainty has created inefficiencies in many markets and that means opportunities for good managers,” the manager explained. “Active ETFs now account for only 6% of the exchange-traded fund market, but they represent a revolution in this industry because of their cost, transparency, efficiency and flexibility,” Gatch said.

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The CEO of JPMorgan AM also highlighted the commitment to technology. “This is the biggest challenge facing the industry. We already have 150 engineers. “This will allow us to reduce costs and provide more added value to customers.” Along with ETFs, another key direction of development for US managers are alternative products. “Unlisted assets provide diversification to clients’ portfolios,” Gatch said.

Karen Ward, the manager’s chief market strategist, also attended the event and sent an optimistic message about the global situation. He highlighted, “The economy is performing better than managers thought two years ago.” In his opinion, inflation, although it is decreasing, will be the key variable on which the market behavior will depend in the coming months. “Real wages are rising for the first time in a long time. This is good news for consumption. Furthermore, fiscal policy should work in favor of economic growth. “Governments are undertaking massive public spending efforts to finance the energy and digital transformation.”

Regarding monetary policy, Ward believes that western central banks will start lowering rates next summer. “But they will remain higher than before Covid. If you think about it, this would be a good sign because it would mean that the global economy has enough strength to move away from zero rates.

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