To its credit, JPEM has gained nearly 5% since coming to market despite a scant 0.1% weight to Russian stocks. Though controversial and volatile, Russian stocks have been major contributors to the year-to-date upside realized by some multi-country emerging markets ETFs.
Latin America, home to some of the most downtrodden equity markets in the developing world, accounts for just 13.6% of JPEM’s weight. That could prove to be a slight disadvantage for the ETF if moribund Brazilian and Mexican stocks rebound in earnest. Those markets combine for 12.5% of JPEM’s weight, slightly more than the MSCI Emerging Markets Index allocates to stocks in those countries.
ETF’s combined allocation to the energy, telecom and utilities sectors – often home to large concentrations of state-run companies – is just 18.4%.
JPMorgan Diversified Return Emerging Markets Equity ETF
Table Courtesy: J.P. Morgan Funds