JPMorgan Chase & Co. (JPM), the sixth-largest ETF issuer, said first-quarter assets in its exchange-traded fund business jumped 39% as inflows surged into its biggest funds, including JEPI and JEPQ.
ETF assets under management rose to $239.9 billion from $172.6 billion in the prior year’s first quarter, according to New York-based JPMorgan, the biggest U.S. bank. That growth was fueled in part by the company’s ETFs, which pulled in $19.1 billion in flows, a 30% jump from the year-earlier period.
ETF issuers like JPMorgan and BlackRock Inc. (BLK) benefitted as investors plowed $296 billion into ETFs during the first quarter, even as markets dropped, with the S&P 500’s 4.6% decline marking its worst first quarter in three years. BlackRock, whose iShares is the world’s largest ETF issuer, reported $107 billion in total net inflows into ETFs for the quarter.
JPMorgan is focused on active ETFs, with six of its seven first-quarter launches in that category. Assets in its active business surged 58% to $177.2 billion, and inflows nearly doubled to $18.4 billion. The company doesn’t offer the passive, major index-tracking ETFs its rivals rely on to bring in big inflows, instead opting for more specalized, income-generating funds like the $38 billion JPMorgan Equity Premium Income ETF (JEPI). Those funds carry higher management fees than passive funds.
“Q1 has been favorable for active management” in equities and fixed income, Travis Spence, J.P. Morgan Asset Management’s global head of ETFs, said in an emailed statement. In equities, the company has “focused on re-evaluating our fundamental views at the company level of post-election changes to earnings momentum, including the recent tariff tantrum, and in fixed income, where both rates and credit spreads are moving.”
JEPI, which invests in large-cap stocks and equity-linked notes to generate income, pulled in $2.8 billion in the quarter. JPMorgan’s second-largest fund, the $29.9 billion JPMorgan Ultra-Short Income ETF (JPST), pulled in $3.4 billion, while the $22.8 billion JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) took in $4 billion.
Source: etf.com fund flows data
CEO Jamie Dimon struck a cautious tone in the company’s earnings release, as the global economy confronts “considerable turbulence (including geopolitics).” He enumerated economic positives like tax reform and deregulation alongside “potential negatives of tariffs and ‘trade wars,’ ongoing sticky inflation, high fiscal deficits and still rather high asset prices and volatility.”