JPMorgan wants to convince Canadian retail investors with ETF strategy – BNN Bloomberg

(Bloomberg) – JPMorgan Chase & Co. has plans to capture a significant share of the Canadian retail investment market with the launch of new exchange-traded funds and a hiring campaign north of the border.

The New York-based bank, which aims to tap the savings flow from mutual funds into lower-cost products, will give investors the chance to buy two of its actively managed ETFs – one focused on the S&P 500, the other on the Nasdaq-100 Index – in Canadian dollars, it said in a statement on Tuesday.

“When we think about Canada, we have the right infrastructure in place and we believe we could very easily have a 5% market share in the ETF sector in the coming years,” said Travis Hughes, head of Canada for JPMorgan’s asset management unit . , said in an interview on the Toronto Stock Exchange after the bank opened markets Tuesday morning.

The country’s fast-growing ETF market had C$480 billion ($356 billion) in assets under management across nearly 1,200 funds at the end of August, according to the Canadian ETF Association. That’s up 31% from a year earlier and more than double the C$205 billion in ETF assets at the end of 2019.

Three dominant players in Canadian ETFs – RBC iShares, a partnership between Royal Bank of Canada and BlackRock Inc., and Bank of Montreal and Vanguard Group – collectively control 65% of the market, according to National Bank of Canada calculations.

JPMorgan has operated an asset management business in Canada for four decades and recently expanded its asset management team in the country, where it now has 25 employees in Toronto, Montreal and Vancouver. Hughes expects that number to double in the next one to two years and said the bank could also add staff in Calgary.

The bank, which first started offering ETFs in the U.S. a decade ago before expanding into Europe, Asia and Australia, will partner with major investment dealers across Canada to sell its products. The ETFs offered in the country started trading on the TSX on Tuesday, offering exposure to US stocks and a focus on generating income.

George Gatch, CEO of JPMorgan’s asset management unit, said the bank wants to capitalize on the global movement of money into ETFs – he estimates investors shifted $800 billion from mutual funds to ETFs last year – and differentiate itself with a hands-on approach. strategy.

“The pendulum has swung towards passive investing so far, and we focus exclusively on active management. We have no escape hatch, we have to be good,” he said. “This is an opportunity to take market share from the passive players in this transition that we believe is likely to continue.”

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