As announced in recent months, JPMorgan kicks off the first of four conversions from mutual funds to ETFs, joining a trend in the US market over the past year. The JPMorgan Inflation Managed Bond Fund (ticker JIMAX) will become the JPMorgan Inflation Managed Bond ETF (JCPI) after the close today, according to a notice on the fund’s website. It is the first of four planned conversions by JPM which will therefore transfer a total of approximately $ 9 billion of assets into exchange-traded funds by mid-June.
The cost of the JPMorgan Inflation Managed Bond ETF will be 0.25%, which is lower than the fees on the various share classes of the mutual fund. The conversion will broaden JPMorgan’s US ETF range to 41.
A move that comes after the disaffection towards funds is being confirmed in these first months of the year, with more than $ 160 billion in mutual fund outflowswhile ETFs attracted over $ 200 billion (Investment Company Institute data).
It’s only the beginning?
One year after the first formal conversion between the two investment structures, several issuers are moving in this direction since Investors increasingly prefer low-cost and more tax-efficient ETFs.
The biggest conversions so far come from the quantum giant Dimensional Fund Advisors, which traded around $ 29 billion in June last year. Other switches were made by Motley Fool Asset Management, which finalized a nearly $ 1 billion move in December. Franklin Templeton he plans to do the same later this year.
Bloomberg Intelligence estimates that i Active managers could bring $ 1 trillion to the ETF industry through mutual fund conversions. A transfer that represents a huge boost for the ETF market which in the United States boasts assets of $ 7 trillion (worldwide in 2021 it exceeded 10 trillion), which however still represents only about 5% of the world of funds. investment municipalities. The challenge for most funds is that the transition is complex and not suitable for all products.