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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?

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.

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.

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.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

Managed by J.P. Morgan, JPIN has amassed assets over $377.02 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

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

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

It's 12-month trailing dividend yield comes in at 6.28%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

When you look at individual holdings, Kansai Electric Power Co (9503.T) accounts for about 0.48% of the fund's total assets, followed by Posco Holdings Inc (A005490) and Sembcorp Industries Ltd (SCI - Free Report) .

The top 10 holdings account for about 4.64% of total assets under management.

Performance and Risk

The ETF has gained about 16.15% so far this year and it's up approximately 16.08% in the last one year (as of 12/25/2023). In the past 52-week period, it has traded between $48.36 and $54.84.

The fund has a beta of 0.79 and standard deviation of 14.80% for the trailing three-year period, which makes JPIN a medium risk choice in this particular space. With about 474 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 $61.50 billion in assets, Vanguard FTSE Developed Markets ETF has $119.87 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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