J.P. Morgan will offer a series of target date funds that will be using both ETFs and actively managed funds.

Jason Kephart of InvestmentNews writes that this could be the passport of ETFs to 401(k).

Paul Justice, Morningstar's co-head of passive strategy research agreed.

“This is how ETFs get into 401(k) plans," he said. "Any newly launched multi-asset products are probably strongly considering ETFs to access markets.”

The JPMorgan SmartRetirement Blend funds will invest in ETFs in the large-cap equities category which will constitute up to 40 percent of the funds.

Kephart writes that these funds will be the first to use both active and passive management. The ETFs will give the fund leeway to charge lower fees than their actively-managed counterparts.

Expense ratio for the blend funds will be 85 basis points, while the JP Morgan SmartRetirement target date funds will charge 99 basis points.

Franklin Templeton [profile] target date funds has started to allocate 5 percent of assets in ETFs and plans to increase it to 10 percent, according to a report from Reuters. 

Edited by: HFD


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