From the May 2010 issue of Research Magazine • Subscribe!

Chase, Citigroup Eye ETF Business

JPMorgan Chase is planning to introduce both active and index-based bond ETFs, while Citi is setting up an investor services team that will specialize in ETFs.

Not satisfied with just watching the ETF marketplace rapidly grow, more financial firms are making ETFs a priority.

According to recent filings with the Securities and Exchange Commission, JPMorgan Chase is planning to introduce both active and index-based ETFs. One index fund will follow investment-grade U.S. municipal bonds with maturities that range between one to 12 years while another would track investment grade corporate bonds.

Many observers view actively managed ETFs as the next big frontier. In this regard, the filing for active ETFs, if approved, could mean JPMorgan Chase will offer branded funds that invest in stocks, bonds and other ETFs or even other mutual funds.

In related news, Citigroup established an investor services team that will specialize in ETFs. The company also appointed Jeffrey McCarthy as global ETF product head in its Securities and Fund Services business to accelerate efforts in ETFs and related product services globally.

McCarthy will be responsible for product innovation and market development and will coordinate the delivery of end-to-end servicing solutions across trading, distribution and administration for the global ETF market.

"With its global network and reach, Citi is uniquely positioned to help promote ETF product innovation and distribution in domestic and international markets," said Neeraj Sahai, global head of Citi's Securities and Fund Services.
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