Common questions
What is the next step for the ETF space?
As the ETF market expands, providers have looked for different ways of maximising the potential of the structure. In recent years, this has included the launch of the ‘Smart Beta’ ETFs we detailed earlier – an indexing strategy which tilts towards certain performance factors that characterise an index. This could be for ‘value’ stocks which may be considered under-priced within a market, or those which are assessed to have greater ‘momentum’.
The market for active ETFs, in which J.P. Morgan Asset Management is a leader, continues to attract significant investor interest. Globally, assets under management (AUM) in the space only surpassed $200 billion for the first time in 2020. AUM now sits at around $1.5 trillion, a more than seven-fold increase in less than five years.
Source: J.P. Morgan Asset Management’s Guide to ETFs, data as at 31 July 2025. CAGR stands for compound annual growth rate and reflects the rate at which the global active ETF AUM would have grown by between 2014 and 2025 if it had been at a consistent rate, compounded annually.
Do we hold active ETFs in our portfolios?
For our managed portfolios, we choose a broad range of ETFs, assigning and re-assigning our clients’ money based on our rigorous analysis of the global economy. Our Smart Alpha portfolios powered by J.P. Morgan Asset Management and our Income Investing portfolios predominantly use active ETFs in pursuit of their investment objectives. In particular, they use research-enhanced active ETFs managed by J.P. Morgan Asset Management.
Which currencies are ETFs traded in?
ETFs are commonly traded in sterling, US dollars and euros, although we only invest in ETFs that are traded in sterling. While ETFs tracking non-UK indices, such as the S&P 500, are available in sterling, they are still at risk of currency fluctuations. This is due to the underlying constituent companies being based in the US. We consider this currency risk when investing in an ETF and in certain circumstances may invest in a ‘currency hedged’ version of a fund to mitigate the risk.
Have we considered cryptocurrency ETFs?
The cryptocurrency space continues to attract attention globally. While the market has evolved a great deal in recent years, we do not currently invest in cryptocurrency ETFs within our managed portfolios.
The investment team has a broad range of investment opportunities through which to look for potential investor return. We continue to monitor developments in the cryptocurrency ETF space as it matures, and will continue to consider the possible viability of offerings for our managed portfolios.
Risk warning
As with all investing, your capital is at risk. The value of your portfolio can go down or up and you may get back less than you invest.