Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM) is a smart beta exchange traded fund launched on 01/07/2015.

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.

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.

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

Because the fund has amassed over $390.18 million, this makes it one of the average sized ETFs in the Broad Emerging Market ETFs. JPEM is managed by J.P. Morgan. JPEM, 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

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

It has a 12-month trailing dividend yield of 4.26%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

Taking into account individual holdings, Taiwan Semiconductoraccounts for about 2.08% of the fund's total assets, followed by China Construction Bank and Vale Sa Common Stock Brl (VALE3).

Its top 10 holdings account for approximately 10.96% of JPEM's total assets under management.

Performance and Risk

The ETF has added about 8.84% and it's up approximately 20.32% so far this year and in the past one year (as of 08/04/2026), respectively. JPEM has traded between $56.91 and $67.16 during this last 52-week period.

The ETF has a beta of 0.47 and standard deviation of 12.71% for the trailing three-year period, making it a medium risk choice in the space. With about 588 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 Emerging Markets Stock Index Fund ETF Shares (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 Emerging Markets Stock Index Fund ETF Shares has $121.3 billion in assets, iShares Core MSCI Emerging Markets ETF has $152.24 billion. VWO has an expense ratio of 0.06% 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

.

Boost Your Portfolio with Our Top ETF Insights

Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.

Don’t miss out on this valuable resource. It’s free!

Get it now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

JPMorgan Diversified Return Emerging Markets Equity ETF (JPEM): ETF Research Reports

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

Zacks Investment Research