JP Morgan joins with Source for volatility ETF
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JP Morgan has launched an exchange-traded fund (ETF) that aims to provide investors with cost-effective, long-term exposure to volatility.
The JP Morgan Macro Hedge US Total Return Source ETF has been designed for sophisticated investors as a hedging tool or to take standalone volatility exposure.
According to the providers, the ETF aims to capture spikes in volatility in times of market stress, and generate a positive return in normal market conditions.
Rui Fernandes, head of equity and funds derivatives structuring at JP Morgan, says: “Our Macro Hedge Indices combine long volatility exposure with a transparent source of absolute return.”
The fund will take both long and short exposure to futures on US equity volatility, and switch from long to long/short depending on market conditions.
Ted Hood, chief executive of Source, says: “We see escalating interest in volatility in today’s markets but the challenge is always the high cost, which makes this product particularly interesting.”
The London-listed, Dublin-domiciled ETF will trade in US dollars and carries a management fee of 0.25% per year.
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