Products June 16, 2014

J.P. Morgan Jumps into ETF Marketplace

J.P. Morgan has entered the exchange-traded fund (ETF) market through the launch of a geographically diverse suite of core equity ETFs called the Diversified Return ETFs.
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The firm says it has already released the first fund in the ETF series, named the JPMorgan Diversified Return Global Equity ETF (JPGE). The “strategic beta” fund is designed to be the foundation of a global equity portfolio, J.P. Morgan explains, with the added purpose of keeping clients invested and confident during periods of market volatility.  

The JPGE fund seeks global equity returns with reduced volatility by diversifying across regions and sectors, according to the fund’s prospectus and other explanatory documents. The JPGE fund considers multiple performance factors—value, size, momentum and low volatility—and seeks to track the FTSE Developed Diversified Factor Index, created in partnership with J.P. Morgan. As the firm explains, the index measures risk-adjusted returns by combining the four factors within a systematic risk framework designed to enhance the consistency of returns.

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J.P. Morgan says it is devoting significant time and resources to creating and launching new and innovative solutions for “the next phase of ETFs,” especially as ETFs evolve from their passive beginnings to include a wider range of strategies and methodologies. The firm says it hopes to provide the investment expertise and thoughtful solutions ETF investors “need now more than ever.”

ETFs are one of the fastest growing segments of the investment industry, according to financial research and analytics firm Cerulli Associates. The firm recently published data showing that investors have propelled U.S. ETF assets to $1.7 trillion, as of year-end 2013. Cerulli Associates projects the U.S. ETF market will continue to grow strongly and could surpass $4 trillion by 2017.  

J.P. Morgan joins the ETF market at a time that index-based ETF strategies have evolved from traditional index-tracking to more sophisticated approaches, often called “smart beta.” The label covers a wide and growing pool of varying strategies and ETFs, including funds with full active management, J.P. Morgan says. (See “A New Look at Old Beta.”)

Citing another financial research firm, Cogent Research, J.P. Morgan says more than half of institutional decisionmakers plan to increase their use of strategic beta ETFs over the next three years, with actively managed ETFs entering the market at an increasing rate. Investors appear to be attracted by the tax advantages, cost efficiencies and intraday liquidity associated with ETFs, the research shows.

J.P. Morgan says it is taking a dedicated, long-term approach to ETF management and is currently engaged in laying the groundwork for a full range of strategic beta and other ETF solutions. The firm envisions a next generation of ETFs that entail sophisticated strategies and require an investment manager with a deep research platform and experience capturing alpha.

More information on the JPGE fund, and the pending Diversified Return ETFs, is available here.

Products June 16, 2014

Mutual of Omaha Offers Plan Administration Services

Mutual of Omaha Retirement Services is now offering 401(k) Admin Advantage, an Employee Retirement Income Security Act (ERISA) 3(16) administration service.
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The service is designed to ease day-to-day demands of retirement plan administration, while minimizing risks for plan sponsors and supporting the independent services of plan advisers and third-party administrators (TPA).

Plan sponsors can choose one or both of the available service levels:

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  • Level One, Participant Notice Distribution: Electronic or print distribution of a comprehensive list of participant notices that are mandated by the Department of Labor and Internal Revenue Service.
  • Level Two, Transaction Processing: Services related to reviewing participant requests and approving and processing transactions.

“Plan administration for 401(k)s can be time consuming and overwhelming, especially for small to mid-size businesses,” says John Corrieri, vice president of 401(k) services at Mutual of Omaha. “With 401(k) Admin Advantage, we serve as a cofiduciary for certain administrative requirements, sharing regulatory obligations with plan sponsors. Plan administrators gain peace of mind knowing these duties are handled by experienced professionals who will work with their adviser and possible TPA, so they can focus on their business.”

More information about Mutual of Omaha Retirement Services’ 401(k) Admin Advantage, as well as other retirement products and services, can be found at http://www.sellretirementright.com.

Mutual of Omaha is a provider of insurance, banking and financial products for individuals, businesses and groups throughout the United States. More details about Mutual of Omaha can be found at http://www.mutualofomaha.com.

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