By ETF Heat Map Team

J.P. Morgan Asset Management recently revealed its first actively managed alternative ETF called the J.P. Morgan Diversified Alternatives ETF (JPHF). It provides investors with broadened exposure to different hedge fund strategies including long/short equity, event driven and global macro comprehensive strategies with an expense cap of 0.85%. The traditional 2 and 20 hedge fund model is quickly going out of fashion as cost effective and often better performing alternative ETF investment instruments enter the market.

Yazann Romahi, the global head of quantitative beta solutions at JP Morgan, designed and manages this exchange traded fund. Romahi has made it easy for the investors to take advantage of quality hedge strategies through a fund that takes a bottom up approach to constructing the portfolio and attempts to provide greater diversification than a traditional hedge fund while wrapping the investment solution in a cost effective ETF package.

Strategy_ChessJPHF assists in enhancing diversification and aims to provides better risk-adjusted returns with greater liquidity, transparency, and lowers costs.

Previously alternative investment options and hedge fund strategies were only made readily available to a smaller group of pre-screened sophisticated investors. However, JPHF enhances accessibility for all investors by allowing them to gain exposure to hedge strategies through the purchase of a highly liquid ETF.

J.P. Morgan’s ETF division has shown growth but is criticized for being slow in entering into the ETF market. Comparatively, the global ETF leader, iShares owned by BlackRock, reports having over 700 ETFs and over US $1 trillion of Assets under Management.

Hedge fund related ETFs from the ETF Heat Map database worth exploring include:

  • QAI – Financial Engines IQ Hedge Multi-Strategy Tracker ETF
  • JPHF – J.P. Morgan Diversified Alternatives ETF
  • HHF – Horizons Morningstar Hedge Fund Index ETF



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