Valerie: Welcome back to ETF Innovators, where we track the evolution of the global ETF landscape and spotlight the leaders, ideas, and strategies powering the next wave of performance. Joining me today is Travis Hughes, Head of Canada at J.P. Morgan Asset Management, a global leader in the asset management space.
Travis: Thank you for having me, Valerie.
Valerie: It's great to have you here today. I wanted to kick things off and talk about something that we are seeing really shift and transform the ETF industry, and that of course is the evolution of technology and embedding different technological advancements within the ETF industry. Can you share a little bit more about how your firm is using these tools and innovations to drive your business?
Travis: Absolutely, Valerie. I think it's interesting because it's a unique area where J.P. Morgan's global scale and reach really has a competitive advantage. So, for Asset Management, we have a $500 million technology budget, and over 1500 individuals focused on building, maintaining, and expanding our technology platform. We also have the ability to tap into the more broad J.P. Morgan $17 billion technology budget. We use it in two different ways. First and foremost, we're an active manager and we want to make sure that we give our portfolio managers access to the best information as quickly as possible. The second thing we do is to, to use technology and AI to put us in a better position to cover our clients and give them access to information customized to their unique needs and desires.
Valerie: AI obviously has been a key buzzword and a key disruptor really in the financial services industry. I was wondering if you could just expand on that a little bit more and how you are implementing AI within the ETF franchise?
Travis: Yeah, no, absolutely. So, we have a proprietary investment platform that's called Spectrum. And AI is embedded in that. And I'll give you a very specific example. We have over 40 years of data from our analysts, research on individual companies, forecast for earnings revisions to forecast, and we've used AI and large language models to take all that information and put it in a format that the portfolio managers can easily access. We also use AI for our portfolio management teams to stress test their portfolios; to have the AI system take a look at what they're doing to see if there's any unique characteristics or biases in the portfolios.
Valerie: Very interesting. I think it is really about molding and melding those two things together. The human expertise and also the power of the large language models in AI. I did want to quickly pivot to active management, and especially active within the vehicle of an ETF. J.P. Morgan, a huge leader in the space. You have the largest active equity ETF in the US alongside the largest active bond or fixed income ETF. Very impressive. Could you share a little bit more about why you've been so successful there and what role active ETFs can provide within a portfolio?
Travis: The active ETF kind of marries the best of both worlds. You have the benefits of active management, security selection, portfolio construction, research and analysis in an ETF wrapper that gives you liquidity, transparency, and lower cost. From a portfolio construction standpoint. While we're an active manager, we certainly realize that it's not just active, that there's a balance between active and passive. And the strategies that we've brought to market, not only in Canada but globally, are designed to be core allocations and portfolios.
Valerie: Another area that we would be remiss not to highlight is of course your global reach. Can you talk a little bit more about that global perspective that you bring and perhaps maybe more about how you have taken certain strategies that have worked in other geographies and brought them globally?
Travis: Our global reach and the global platform really is a competitive advantage. And so, when we look at the ETF universe, it is through the global lens. So, I'll give you a couple of examples. JEPI, the J.P. Morgan equity premium income ETF, originated in the U.S. and then was taken to EMEA, Australia and Canada about a year ago. And so, our research enhanced indexed ETFs, that suite launched there and then we brought those to the US and Asia, and they've had a tremendous amount of success – and we learned a lot. So, when we first launch a strategy, there's, you know, typically a bit of a learning curve that we go through. And then we also learn from the regulatory environment as well. So, we're able to see what local regulators think about a strategy, any questions they have, and that gives us kind of a roadmap for what we may face in other markets in the future.
Valerie: Now, Travis, the ETF landscape has evolved rapidly over the past decade, it’s continuing to grow rapidly, I would love to get your perspective on where you think the ETF industry is going to head and evolve to over the coming decade?
Travis: Yeah, Valerie, it's a great question. It’s certainly an exciting time. We crossed a trillion dollars and flows already in 2025, and we still have a two and a half months to go. So, the, the industry continues to expand and grow. I think there are maybe four main areas that I think we'll see continued innovation and growth. ETFs traditionally have been kind of equity-oriented strategies and we're seeing more fixed income, commodities, asset allocation strategies. So, I think you'll see more innovation from an investment style standpoint. The second thing is the rise of private investments in an ETF wrapper. So whether it be private equity, private credit, real estate, I think there's going to be innovation there. The third is the use of ETFs in model portfolios, and we've seen this really as a growth area in the US and Europe, where the ETF structure is the preferred, vehicle for model delivery and model portfolios. The last thing I would say is just a general innovation around how products are delivered through the digital space. So, there are multiple digital platforms across the world. We have a younger investor base who gravitate towards ETFs, and I think that technology will continue to improve and grow.
Valerie: That's a fantastic answer. So, we have just the general growth of the vehicle. We have model portfolios, we have private assets within an ETF, and then also the focus on digital growth and the direct investor.
Valerie: Travis, we like to wrap up every ETF Innovators series video with a rapid fire round. Are you ready?
Travis: I am ready. Sounds like fun.
Valerie: Alright. Sectors or factors?
Travis: Sectors.
Valerie: Value or growth?
Travis: Value.
Valerie: What is your favorite? ETF ticker
Travis: JGLO.
Valerie: Oh, I have lot. What is a unique ETF theme?
Travis: Active fixed income.
Valerie: And name one ETF that everyone should know about.
Travis: J Bond. JBND.
Valerie: Travis, it sounds like we have a lot to look forward to in the coming years here in the ETF space. It all sounds very exciting. Thank you so much for bringing your insights here today, especially your fresh, global perspective, and obviously your expertise in the active management space.