JPMorgan Wants In on the Great White North
The bank’s asset management arm has made two ETFs available on the Toronto Stock Exchange, and plans to grow staff in Canada.
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ETFs give you more liquidity and they’re cheaper, eh?
JPMorgan plans to solidify a retail investment foothold in Canada by expanding staff in the country and listing two of its active exchange-traded funds on the Toronto Stock Exchange. Last week, investors in the Great White North were able to start trading shares of the S&P-focused JEPI and Nasdaq-centric JEPQ. JPMorgan Asset Management also announced it will add 20 jobs to its business in Canada — which accounts for $40 billion of its total global $3.3 trillion assets under management — over the next 18 months.
The goal is to double staff and capture 5% of the ETF market share north of the border, Travis Hughes, head of Canada for JPMorgan’s asset-management unit, told Bloomberg. Right now, three groups — the Bank of Montreal, Vanguard, and RBC iShares (a partnership between the Royal Bank of Canada and BlackRock) — collectively control roughly 66% of the market, according to BMO.
Oh, Canada
American investors have been moving savings from mutual funds to cheaper vehicles like ETFs in recent years. After operating an asset management business in Canada for the past four decades, JPMorgan believes Canucks will continue to do the same.
Investors shifted $800 billion from mutual funds to ETFs globally last year, JPMorgan Asset Management CEO George Gatch told Bloomberg, and he estimates that there is an opportunity to snag more market share:
- In September, ETFs gathered CA$5.8 billion, bringing year-to-date inflows to CA$49 billion, according to the National Bank of Canada. Also, 24 new ETFs launched in Canada last month.
- At the end of August, the AUM for Canadian ETFs totaled around CA$480 billion, a more than 31% increase year-over-year, according to the Canadian ETF Association.
Meanwhile, Canadian mutual funds have rebounded from more than CA$23 billion in outflows last year, but experienced year-to-date inflows of only CA$3.6 billion by the end of August, the Investment Funds Institute of Canada reported.