JPMorgan to convert another $2 billion mutual funds into ETFs | Jobs Vox


(Bloomberg) — JPMorgan’s asset management arm has filed suit to convert four more mutual funds with nearly $2 billion in assets into exchange-traded funds.

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The plans follow the success of the company’s first four exchanges in June and bring the JPMorgan US ETF lineup to 50 funds. The funds slated for conversion are two municipal bond funds, one short-term bond fund and one equity fund, according to the press release.

“We think one of the biggest advantages of switching over alternatives is the ability to carry track records. And these funds have seriously long track records,” said James Seifert, ETF analyst at Bloomberg Intelligence.

Two of the funds slated for the switch, the $243 million JPMorgan Sustainable Municipal Income Fund (ticker OTBAX) and the $1.1 billion JPMorgan Limited Duration Bond Fund (ONUAX), have been trading for nearly 30 years, making them ripe for conversion.

“These funds have less exposure in 401k or retirement-type accounts compared to many other funds, which makes the ETF conversion more attractive,” Seyfart added.

The boards of each mutual fund will consider the conversions in February 2023, and if approved, the funds will become ETFs in July, according to the release.

Since Dimensional Fund Advisors launched its first regular mutual fund-to-ETF conversions in June 2021, 38 mutual funds with a total of $62 billion in assets have converted to ETFs, according to Bloomberg Intelligence. BI estimates that number could rise to $1 trillion over the next 10 years as more asset managers invest in traditionally low-cost, tax-efficient ETFs.

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