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The newly launched HELO invests in U.S. large-cap equities with a laddered options overlay. The strategy attempts to capture a significant portion of the U.S. equity market returns with lower volatility over the long-term, which should lead to competitive risk-adjusted returns. The laddered hedge overlay of HELO will consist of three hedges lasting three months, each staggered one month apart. This approach aims to provide downside protection and upside capture.
Hamilton Reiner, portfolio manager and Head of U.S. Equity Derivatives at J.P. Morgan Asset Management, expressed excitement about bringing HELO to market as it offers a unique solution that suits the needs of their clients. “Helping investors get invested and stay invested has always been our North Star,” Reiner said.
Bryon Lake, Global Head of ETF Solutions at J.P. Morgan Asset Management, highlighted the team’s strong success with active ETFs like JEPI and JEPQ, stating that HELO is a great addition to their active ETF family.
The new ETF launch comes at a time when risk assets are under pressure due to soaring rates as the Federal Reserve signals it will keep borrowing costs higher for longer. Amid this backdrop, HELO’s strategy should help investors “stay invested” while also allowing for “some semblance of sleeping at night,” according to Reiner.
The ETF is managed by an experienced equity portfolio management team including industry veterans Hamilton Reiner and Raffaele Zingone, a portfolio manager in the U.S. Equity Core group. The active hedged equity ETF is offered at a price point of 50 bps.
J.P. Morgan Asset Management ranks as a top ten ETF issuer in the U.S. with respect to AUM, and number one year to date in net active flows across active ETFs in the U.S. As of June 30, 2023, J.P. Morgan Asset Management managed $2.8 trillion in assets, while JPMorgan Chase (NYSE:JPM) had $3.9 trillion in assets and $313 billion in stockholders’ equity.
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