JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) Review: A Strong Smart Beta ETF Option?

The JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) is a smart beta ETF that debuted on 01/07/2015, offering exposure to the Broad Emerging Market ETFs category. It tracks the FTSE Emerging Diversified Factor Index and has over $343.14 million in assets. The ETF has an expense ratio of 0.44% and a 12-month trailing dividend yield of 5.06%. Its top holdings include Taiwan Semiconductor, Infosys Ltd Common Stock, and Bank Of China Ltd Common.

The JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) is a smart beta ETF that has been gaining traction since its debut on January 7, 2015. This ETF offers broad exposure to the Broad Emerging Market ETFs category and tracks the FTSE Emerging Diversified Factor Index. With over $343.14 million in assets under management, JPEM presents an attractive option for investors seeking diversified exposure to emerging markets.

Fund Sponsor & Index

JPEM is managed by J.P. Morgan and seeks to replicate the performance of the FTSE Emerging Diversified Factor Index. This index reflects the performance of emerging market securities that exhibit a diversified set of factor characteristics, including Value, Price, Momentum, Earnings, Revisions, and Quality.

Cost & Other Expenses

One of the key considerations for investors is the expense ratio, which is a measure of the fund's annual costs as a percentage of its assets. JPEM has an annual operating expense ratio of 0.44%, which is on par with most peer products in the space. Additionally, the ETF offers a 12-month trailing dividend yield of 5.06%, providing a modest income stream for investors.

Sector Exposure and Top Holdings

ETFs offer diversified exposure, which helps minimize single stock risk. By examining the top holdings of JPEM, investors can gain insights into the fund's allocation. Taiwan Semiconductor accounts for about 2.03% of the fund's total assets, followed by Infosys Ltd Common Stock and Bank of China Ltd Common. The top 10 holdings account for approximately 10.62% of JPEM's total assets under management.

Performance and Risk

As of July 2, 2025, JPEM has gained about 12.34% so far this year and was up about 9.3% in the last one year. The ETF's performance over the past 52 weeks has ranged between $48.41 and $57.84. With a beta of 0.51 and a standard deviation of 12.83% over the trailing three-year period, JPEM is considered a medium-risk choice in the space. The fund's 567 holdings effectively diversify company-specific risk.

Alternatives

While JPEM offers a compelling option for investors seeking to outperform the Broad Emerging Market ETFs segment, there are other ETFs in the space that investors could consider. For instance, the Vanguard FTSE Emerging Markets ETF (VWO) and the iShares Core MSCI Emerging Markets ETF (IEMG) are both popular choices. VWO has $92.57 billion in assets and an expense ratio of 0.07%, while IEMG has $97.48 billion in assets and an expense ratio of 0.09%.

Conclusion

The JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) is a well-diversified smart beta ETF that offers broad exposure to the Broad Emerging Market ETFs category. With a reasonable expense ratio and a modest dividend yield, JPEM presents a viable option for investors seeking to gain exposure to emerging markets. However, investors should carefully consider their risk tolerance and investment objectives before making any investment decisions.

References

[1] https://finviz.com/news/96692/is-jpmorgan-diversified-return-emerging-markets-equity-etf-jpem-a-strong-etf-right-now
[2] https://finance.yahoo.com/news/jpmorgan-diversified-return-emerging-markets-102002840.html