J.P. Morgan and Source offer volatility exposure with a european slant.…
Sign up for our weekly Newsletter and receive the latest ETF and ETC news.
Click here to register for your free copy
Volatility is an attractive hedge in times of macro-economic stress – it tends to spike when equities and other risky assets crash. However, volatility exposure can be costly over the long term. J.P. Morgan’s Macro Hedge indices aim not only to capture spikes in volatility in times of market stress, but also, when markets are calmer, to generate a positive return. The J.P. Morgan Macro Hedge Dual TR Index takes exposure to US equity volatility, switching from long to long/short exposure depending on market conditions. During times of market stress, it can also add up to 25% exposure to European equity volatility. Although liquidity in European volatility markets still lags the US, the Euro-zone debt crisis has prompted more investors to include European volatility in their hedging strategies.
“This product could be particularly interesting for investors with focus on European markets,” says Rui Fernandes, Head of Equity and Funds Derivatives Structuring at J.P. Morgan. “. By combining US and European volatility exposure in a single product, we can offer some regional diversification without compromising on liquidity.”
Source CEO Ted Hood also commented on the launch: “Source’s existing volatility products already account for over 70% of the assets in European-listed volatility ETPs. This new ETF, with its combination of US and European exposure, represents another step forward in the development of efficient volatility tools for investors.”
The J.P. Morgan Macro Hedge Dual TR Source ETF is listed on the London Stock Exchange and trade in euro. It is registered for sale in Austria, Finland, France, Germany, Ireland, Italy (for institutional investors only), Luxembourg, the Netherlands, Norway, Sweden and the UK.
Source UK Services Limited is authorised and regulated by the Financial Services Authority in the UK.
PRODUCT SUMMARY
| Product name | J.P Morgan Macro Hedge Dual TR Source ETF |
| ISIN | IE00B675BN95 |
| Bloomberg Ticker | MHDU LN |
| Base/trading currency | EUR/EUR |
| Management Fee | 0.25 % per annum* |
| Listing | London Stock Exchange |
| Benchmark | J.P. Morgan Macro Hedge Dual TR Index |
| Benchmark Bloomberg Ticker | JPMZMHHT Index |
| UCITS eligible | Yes |
| Domicile | Ireland |
* An index cost of 0.75% per annum and certain notional rebalancing costs are included in the calculation of the Benchmark
The product described within this publication is designed for sophisticated investors only. The benchmark index is highly volatile and may have absolute exposure of up to 200% of the net asset value of the product. Investors’ capital is at risk and the amount originally invested may not be recovered.
Investors should not deal in these products unless they understand their nature and the extent of their exposure to risk. The value of these products can go down as well as up and can be subject to volatility due to factors such as price changes in the underlying instrument and interest rates. It is recommended that potential investors study the Prospectus before investing.
Source: ETFWorld – SourceETF
Subscribe to Our Newsletter
