Morgan executives said this week that their new menu of ETF servicing activities includes custody, securities processing, index receipt agent, transfer agency, fund/trust administration, and fund accounting.
The company predicted strong ETF growth with asset levels reaching $400 to $500 billion within five years.
“JP Morgan Investor Services has identified ETFs as a key strategic initiative and primary opportunity for new business growth,” said Mary Kay Orr, senior vice president and group executive for Global Funds Services.
ETFs are similar to index mutual funds in that they track an index, provide diversification for investors, and are typically offered at relatively low cost.
Unlike traditional index mutual funds, ETFs trade and are valued like a stock, as they can be bought and sold on a securities exchange throughout the day.
The Vanguard Group recently awarded JP Morgan Investor Services custody of approximately $157 billion in assets for six of its mutual funds.
Through this arrangement, JP Morgan Investor Services will also conduct securities processing for Vanguard’s proposed offering of exchange-traded shares, known as VIPERS (Vanguard Index Participation Equity Receipts), when they become effective.