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Is JPMorgan Diversified Return International Equity ETF (JPIN) a Strong ETF Right Now?

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The JPMorgan Diversified Return International Equity ETF (JPIN - Free Report) made its debut on 11/06/2014, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World 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.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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 $732.95 million, making it one of the average sized ETFs in the Broad Developed World ETFs. JPIN, before fees and expenses, seeks to match the performance of the FTSE Developed ex North America Diversified Factor Index.

The JP Morgan Diversified Factor International Equity Index utilizes a rules-based approach combining risk-weighted portfolio construction with multi-factor security screening based on value, quality and momentum factors.

Cost & Other Expenses

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.37%.

It has a 12-month trailing dividend yield of 5.91%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Daito Trust Construction (1878.T) accounts for about 0.48% of total assets, followed by Ajinomoto Co Inc Common (2802.T) and Sembcorp Industries Ltd (SCI - Free Report) .

Its top 10 holdings account for approximately 4.52% of JPIN's total assets under management.

Performance and Risk

Year-to-date, the JPMorgan Diversified Return International Equity ETF has lost about -16.21% so far, and is down about -16.10% over the last 12 months (as of 11/15/2022). JPIN has traded between $42.35 and $60.76 in this past 52-week period.

The fund has a beta of 0.78 and standard deviation of 21.53% for the trailing three-year period, which makes JPIN a medium risk choice in this particular space. With about 481 holdings, it effectively diversifies company-specific risk.

Alternatives

JPMorgan Diversified Return International Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $48.08 billion in assets, Vanguard FTSE Developed Markets ETF has $97.38 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World 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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