J.P. Morgan turns to Schwab to sell passive funds

J.P. Morgan Asset Management, the top-selling stock-picking fund manager for the past two years, is getting help selling its index-tracking ETFs from Charles Schwab & Co. The fund group on Tuesday joined Schwab's ETF OneSource program that makes 211 exchange-traded funds available to clients, including its 7,000 affiliated financial advisory firms, without trading commissions. Three of its ETFs will join the program, including the JPMorgan Diversified Return Global Equity ETF (JPGE). That ETF, now one year old, was the firm's first such fund. Like the firm's other funds, it uses an exotic, “smart beta” investment strategy. The fund has $45 million in assets. The firm has two additional ETFs applying a similar strategy to different markets in the pipeline, according to regulatory filings. “We're out talking with these advisers, and what they're saying is they want to see this on the OneSource platform,” said Robert Deutsch, global head of J.P. Morgan Asset Management's ETF unit. Commission-free trading has been a marketing coup among advisers, and Schwab claims more depth in its platform than its competitors. Schwab said $45 billion in assets are in the program, with $5.8 billion moving in this year, more than a third of all the money moving into ETFs on the Schwab platform. The program may be even more popular with Schwab's partner fund companies, who pay for access to the platform to drive assets to their fund lineup and step above the fray of dozens of competitors who aren't on the platform.