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Is JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) a Strong ETF Right Now?
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A smart beta exchange traded fund, the JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM - Free Report) debuted on 01/07/2015, and offers broad exposure to the Broad Developed Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
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 sponsored by J.P. Morgan. It has amassed assets over $287.68 million, making it one of the average sized ETFs in the Broad Developed Market ETFs. JPEM seeks to match the performance of the FTSE Emerging Diversified Factor Index before fees and expenses.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for JPEM are 0.44%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 4.21%.
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.
Taking into account individual holdings, Infosys Ltd Common Stock (INFY_D.) accounts for about 1.64% of the fund's total assets, followed by Vale Sa Common Stock Brl (VALE3) and Taiwan Semiconductor.
JPEM's top 10 holdings account for about 10.3% of its total assets under management.
Performance and Risk
Year-to-date, the JPMorgan Diversified Return Emerging Markets Equity ETF has added about 2.52% so far, and is down about -0.37% over the last 12 months (as of 05/30/2023). JPEM has traded between $44.60 and $53.52 in this past 52-week period.
JPEM has a beta of 0.71 and standard deviation of 15.48% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 538 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 Developed 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 $69.43 billion in assets, Vanguard FTSE Emerging Markets ETF has $70.84 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 Developed 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?
A smart beta exchange traded fund, the JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM - Free Report) debuted on 01/07/2015, and offers broad exposure to the Broad Developed Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
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 sponsored by J.P. Morgan. It has amassed assets over $287.68 million, making it one of the average sized ETFs in the Broad Developed Market ETFs. JPEM seeks to match the performance of the FTSE Emerging Diversified Factor Index before fees and expenses.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for JPEM are 0.44%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 4.21%.
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.
Taking into account individual holdings, Infosys Ltd Common Stock (INFY_D.) accounts for about 1.64% of the fund's total assets, followed by Vale Sa Common Stock Brl (VALE3) and Taiwan Semiconductor.
JPEM's top 10 holdings account for about 10.3% of its total assets under management.
Performance and Risk
Year-to-date, the JPMorgan Diversified Return Emerging Markets Equity ETF has added about 2.52% so far, and is down about -0.37% over the last 12 months (as of 05/30/2023). JPEM has traded between $44.60 and $53.52 in this past 52-week period.
JPEM has a beta of 0.71 and standard deviation of 15.48% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 538 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 Developed 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 $69.43 billion in assets, Vanguard FTSE Emerging Markets ETF has $70.84 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 Developed 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.