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Is JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) a Strong ETF Right Now?
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The JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM - Free Report) was launched on 01/07/2015, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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
The fund is sponsored by J.P. Morgan. It has amassed assets over $328.74 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. Before fees and expenses, this particular fund 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.44%.
It has a 12-month trailing dividend yield of 4.43%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that 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).
Its top 10 holdings account for approximately 10.17% of JPEM's total assets under management.
Performance and Risk
Year-to-date, the JPMorgan Diversified Return Emerging Markets Equity ETF has added roughly 6.27% so far, and is up about 9.58% over the last 12 months (as of 08/30/2024). JPEM has traded between $47.68 and $56.92 in this past 52-week period.
The ETF has a beta of 0.70 and standard deviation of 13.31% for the trailing three-year period, making it a medium risk choice in the space. With about 558 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 - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) 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 $79.95 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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Is JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) a Strong ETF Right Now?
The JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM - Free Report) was launched on 01/07/2015, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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
The fund is sponsored by J.P. Morgan. It has amassed assets over $328.74 million, making it one of the average sized ETFs in the Broad Emerging Market ETFs. Before fees and expenses, this particular fund 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.44%.
It has a 12-month trailing dividend yield of 4.43%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that 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).
Its top 10 holdings account for approximately 10.17% of JPEM's total assets under management.
Performance and Risk
Year-to-date, the JPMorgan Diversified Return Emerging Markets Equity ETF has added roughly 6.27% so far, and is up about 9.58% over the last 12 months (as of 08/30/2024). JPEM has traded between $47.68 and $56.92 in this past 52-week period.
The ETF has a beta of 0.70 and standard deviation of 13.31% for the trailing three-year period, making it a medium risk choice in the space. With about 558 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 - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) 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 $79.95 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.