Expanding Investment Options with New Active ETFs
Singapore investors now have an expanded range of investment options with the introduction of new exchange-traded funds (ETFs) from JPMorgan Asset Management (JPMAM). On August 18, JPMAM announced it had registered eight more active ETFs, bringing its total to 11 available in the city-state. Unlike passive ETFs that are designed to automatically track a market index, active ETFs are managed by professional portfolio managers who make strategic decisions about asset allocation and security selection. These funds are crafted with the goal of outperforming the market and potentially delivering higher returns, especially in volatile or declining market conditions, while passive funds adhere to a buy-and-hold principle. The newly registered funds include seven research enhanced index (REI) ETFs that blend “index-like equity exposure with stock-specific insights” and one conservative fund, the JPMorgan USD Ultra-Short Income Active UCITS, which provides income with low volatility. A significant point for investors is that the ongoing fees for these funds, ranging from 0.2 to 0.4 per cent, are on a par with average management fees for passive ETFs, addressing a common concern about the cost of active management.
Global Trends and Local Market Enthusiasm
JPMorgan’s expansion in Singapore is a part of a much larger global trend of surging interest in active ETFs. According to a Morningstar report, 510 active ETFs were launched globally in 2024, a significant increase from 352 in 2023, with approximately 300 already launched this year. The global inflow into active ETFs reached a staggering US$183 billion in the first half of 2025, with JPMorgan recording the largest inflows at US$25.5 billion. Locally, the interest from Singapore-based investors has been robust. Mr. Ayaz Ebrahim, JPMAM’s chief executive for Singapore and South-east Asia, noted that the level of interest from local investors “has exceeded our initial expectations.” While these new funds are not yet listed on the Singapore Exchange (SGX), Mr. Kang Wei Chin, an ETF product manager at SGX Group, stated that the listing of active ETFs is a “natural evolution” of the market that will take time, as passive ETFs first need to reach a critical mass before active ETF adoption truly takes hold.
Navigating Risks and Future Market Potential
Despite the potential for higher returns and the growing interest in active ETFs, financial experts are advising investors to proceed with caution. Mr. Gerald Wong, chief executive of financial platform Beansprout, highlighted that while the fixed-income fund’s strategy is generally seen as less risky, it is important for investors to remember that it is not capital-guaranteed. He also warned that because the fund is denominated in US dollars, Singapore-based investors whose portfolios are primarily in Singapore dollars may face foreign currency risks. He also pointed out that awareness of active ETFs remains low among retail investors in Singapore because passive ETFs are more established and widely understood as a low-cost way to gain market exposure. However, both Mr. Wong and JPMAM remain optimistic about the future. They believe that as investor awareness grows and performance track records are established, more asset managers will explore launching active ETFs tailored to the specific needs of Singapore-based investors, leading to a more diverse and sophisticated investment landscape.
