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Is JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) a Strong ETF Right Now?
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Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM - Free Report) is a smart beta exchange traded fund launched on 01/07/2015.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by J.P. Morgan. JPEM has been able to amass assets over $200.70 million, making 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 this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 5.72%.
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.
Taking into account individual holdings, Infosys Ltd Common Stock (INFY_D.) accounts for about 1.84% of the fund's total assets, followed by Taiwan Semiconductor and Vale Sa Common Stock Brl (VALE3).
Its top 10 holdings account for approximately 11.18% of JPEM's total assets under management.
Performance and Risk
The ETF has lost about -10.89% so far this year and is down about -8.76% in the last one year (as of 11/24/2022). In the past 52-week period, it has traded between $44.60 and $59.22.
The fund has a beta of 0.70 and standard deviation of 22.68% for the trailing three-year period, which makes JPEM a medium risk choice in this particular space. With about 525 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.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $62.76 billion in assets, Vanguard FTSE Emerging Markets ETF has $66.98 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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?
Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM - Free Report) is a smart beta exchange traded fund launched on 01/07/2015.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by J.P. Morgan. JPEM has been able to amass assets over $200.70 million, making 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 this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 5.72%.
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.
Taking into account individual holdings, Infosys Ltd Common Stock (INFY_D.) accounts for about 1.84% of the fund's total assets, followed by Taiwan Semiconductor and Vale Sa Common Stock Brl (VALE3).
Its top 10 holdings account for approximately 11.18% of JPEM's total assets under management.
Performance and Risk
The ETF has lost about -10.89% so far this year and is down about -8.76% in the last one year (as of 11/24/2022). In the past 52-week period, it has traded between $44.60 and $59.22.
The fund has a beta of 0.70 and standard deviation of 22.68% for the trailing three-year period, which makes JPEM a medium risk choice in this particular space. With about 525 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.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $62.76 billion in assets, Vanguard FTSE Emerging Markets ETF has $66.98 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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.