Yahoo Finance Is JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) a Strong ETF Right Now?
Making its debut on 01/07/2015, smart beta exchange traded fund JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) provides investors broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
JPEM is managed by J.P. Morgan, and this fund has amassed over $323.70 million, which makes it one of the average sized ETFs in the Broad Emerging Market ETFs. Before fees and expenses, JPEM seeks to match the performance of the FTSE Emerging Diversified Factor Index.
The JP Morgan Diversified Factor Emerging Markets Equity Index reflects the performance of emerging market securities representing a diversified set of factor characteristics which include Value, Price, Momentum, Earnings, Revisions and Quality characteristics.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.44% for JPEM, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 4.49%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Infosys Ltd Common Stock (INFY_D.) accounts for about 1.51% of total assets, followed by Taiwan Semiconductor and Petroleo Brasileiro Sa (PETR4).
JPEM's top 10 holdings account for about 10.19% of its total assets under management.
Performance and Risk
Year-to-date, the JPMorgan Diversified Return Emerging Markets Equity ETF has added roughly 4.83% so far, and was up about 12.63% over the last 12 months (as of 06/26/2024). JPEM has traded between $47.68 and $56.92 in this past 52-week period.
JPEM has a beta of 0.71 and standard deviation of 13.32% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 574 holdings, it effectively diversifies company-specific risk.
Alternatives
JPMorgan Diversified Return Emerging Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard FTSE Emerging Markets ETF (VWO) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $78.87 billion in assets, iShares Core MSCI Emerging Markets ETF has $79.02 billion. VWO has an expense ratio of 0.08% and IEMG charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM): ETF Research Reports
iShares Core MSCI Emerging Markets ETF (IEMG): ETF Research Reports
Vanguard FTSE Emerging Markets ETF (VWO): ETF Research Reports
