JPMorgan index ETFs (commission free at etrade)

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shcnno
Posts: 24
Joined: Tue May 09, 2017 10:56 am

JPMorgan index ETFs (commission free at etrade)

Post by shcnno » Tue May 09, 2017 11:03 am

I'm using etrade and noticed today that these are commission free. Looking at JPGE (international) and JPUS (US russel 1000). They are only a couple of years old, but have performed quite well.

Any opinion on wether it's a good idea to buy these comission free ? Alternatively use these for regular saving, and then once in a while sell and buy Vanguard etfs for long term.

As I'm a US non residnet I can't easily switch brokerage, but I can of course buy vanguard ETFs at $6.95 for each trade.

Thanks!

nyclon
Posts: 278
Joined: Fri Oct 02, 2015 5:30 pm

Re: JPMorgan index ETFs (commission free at etrade)

Post by nyclon » Tue May 09, 2017 12:37 pm

shcnno wrote:I'm using etrade and noticed today that these are commission free. Looking at JPGE (international) and JPUS (US russel 1000). They are only a couple of years old, but have performed quite well.

Any opinion on wether it's a good idea to buy these comission free ? Alternatively use these for regular saving, and then once in a while sell and buy Vanguard etfs for long term.

As I'm a US non residnet I can't easily switch brokerage, but I can of course buy vanguard ETFs at $6.95 for each trade.

Thanks!
I wouldn't make those decisions based on $6.95.

GLState
Posts: 133
Joined: Wed Feb 15, 2017 10:38 am

Re: JPMorgan index ETFs (commission free at etrade)

Post by GLState » Tue May 09, 2017 1:28 pm

JPGE is a global fund that has 25% of its portfolio in US stocks, so it would perform better than a 100% foreign fund over the past couple of years. From the prospectus, JPGE's gross expense ratio is 0.93% with a 0.55% waiver until 2/29/2020. JPUS has a also has an expense waiver...0.90% in the prospectus with a 0.71 waiver.

lack_ey
Posts: 6583
Joined: Wed Nov 19, 2014 11:55 pm

Re: JPMorgan index ETFs (commission free at etrade)

Post by lack_ey » Tue May 09, 2017 1:49 pm

GLState wrote:JPGE is a global fund that has 25% of its portfolio in US stocks, so it would perform better than a 100% foreign fund over the past couple of years.
Sure, but it also did better than global stock index funds despite having less US stocks than them.
GLState wrote:From the prospectus, JPGE's gross expense ratio is 0.93% with a 0.55% waiver until 2/29/2020. JPUS has a also has an expense waiver...0.90% in the prospectus with a 0.71 waiver.
Agreed that the large waiver and it being JPMorgan are concerns. They likely wouldn't remove the waiver entirely when it expires but you probably can't trust any given pricing over the long run.
GLState wrote:IShares has a Russell 1000 ETF (IWB) with 0.15% ER.
These are significantly different products, though. JPGE and JPUS are non-market-cap-weighted multifactor funds.

The biggest question here is just how much you believe in factor investing and these specific funds (methodology, etc.) and then whether any advantage here if any is worth the cost, now and potentially down the line. I wouldn't personally want to use these in a taxable account because you never know how these things might change down the line, perhaps from switching index providers or in terms of expenses.

There are a lot of competing multifactor funds these days with varying levels of AUM. The JPM funds have reasonable size and lower bid/ask spreads than others but keep that in mind as well. If all you care about is transaction costs and you don't believe in or care about their multifactor methodology and exposure, note that the bid/ask spread may well be a bigger deal than $6.95 on a given trade, depending on the number of shares traded.

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