Robert Powell — editor of TheStreet's Retirement Daily — often reviews newly launched ETFs, such as this recent look at a JP Morgan Chase ETF that buys intermediate-maturity municipal bonds and a suite of Franklin Templeton funds investing in lesser-followed global markets.
JPMorgan Chase has launched the JPMorgan Municipal ETF (JMUB), an ETF that buys intermediate-maturity municipal bonds. JMUB is designed to deliver federal tax-exempt income and capital preservation by investing in municipal securities.
The fund invests primarily in a diversified portfolio of intermediate-term municipal bonds that are exempt from federal income taxes; emphasizes comprehensive risk/reward analysis to identify investments that may perform well over market cycles; and seeks to maintain an average weighted maturity between three and ten years under most market conditions actively managed and pursues a long-term, value-oriented strategy.
According to Mohit Bajaj, the director of ETF Trading Solutions at WallachBeth Capital, JMUB is unique because it's actively managed rather than index-based like iShares National Muni Bond ETF (MUB).
Over the past month, JMUB has outperformed MUB by one percentage point - 3.64% vs 2.63%. "But what makes JMUB stand apart from MUB is that its weightings are spread across multiple states, whereas MUB is heavily weighted to California and New York," said Bajaj. "Both states are the heaviest taxed states which have cause some municipal bond positions to run up more than they should have."
Franklin Templeton has launched the Franklin FTSE Latin America ETF (FLLA), the Franklin FTSE Saudi Arabia ETF (FLSA), and the Franklin FTSE South Africa ETF (FLZA).
FLLA, with a gross expense ratio of 0.19%, seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Latin America Capped Index. FTSE Latin America Capped Index is a market-capitalization weighted index representing the performance of Latin American large and mid-capitalization stocks.
FLSA, with a gross expense ratio of 0.39%, seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE Saudi Arabia Capped Index. FTSE Saudi Arabia Capped Index is a market-capitalization weighted index representing the performance of Saudi Arabian large- and mid-capitalization stocks.
FLZA, with a gross expense ratio of 0.19%, seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the FTSE/JSE South Africa Capped Index. FTSE/JSE South Africa Capped Index is a market-capitalization weighted index representing the performance of South African large and mid-capitalization stocks.
According to Bajaj, these products are strictly a lower expense fee play versus the Blackrock suite of products. "They are offering a much cheaper expense fee versus what iShares currently has," he said. "These funds are almost half the expense fee than the Blackrock suite of funds."
