Do Not Be Alarmed By the Closing of JP Morgan Indexed ETFs. I say this even as I say that I believe this may be part of an emerging trend. Many mutual fund companies that are known for touting active management but stuck their feet in the water with ETFs will likely follow suit.
The press release said that J.P. Morgan Asset Management will liquidate two exchange-traded funds: JPMorgan U.S. Minimum Volatility ETF, JMIN, and the JPMorgan U.S. Dividend ETF, JDIV.
During the past year, both JDIV and JMIN handily outperformed the S&P 500 Index and more than 75% of non-leveraged equity funds with above-average yields and below-average Betas. It would seem that investors during this period should be happy with these results and are probably less than thrilled that the funds are closing. That said, let’s look at potential replacement holdings for owners of JDIV and JMIN.