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) debuted on 01/07/2015, and offers broad exposure to the Broad Emerging Market ETFs category of the market.

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.

Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

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But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

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.

The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.

Fund Sponsor & Index

JPEM is managed by J.P. Morgan, and this fund has amassed over $343.14 million, which makes it one of the average sized ETFs in the Broad Emerging Market ETFs. This particular fund, before fees and expenses, 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

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.

Annual operating expenses for this ETF are 0.44%, making it on par with most peer products in the space.

It's 12-month trailing dividend yield comes in at 5.06%.

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, Taiwan Semiconductoraccounts for about 2.03% of the fund's total assets, followed by Infosys Ltd Common Stock (INFY_D.) and Bank Of China Ltd Common.

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Its top 10 holdings account for approximately 10.62% of JPEM's total assets under management.

Performance and Risk

The ETF has gained about 12.34% so far this year and was up about 9.3% in the last one year (as of 07/07/2025). In the past 52-week period, it has traded between $48.41 and $57.84

The ETF has a beta of 0.51 and standard deviation of 12.83% for the trailing three-year period, making it a medium risk choice in the space. With about 567 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) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $92.57 billion in assets, iShares Core MSCI Emerging Markets ETF has $97.48 billion. VWO has an expense ratio of 0.07% and IEMG changes 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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JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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