J.P. Morgan Asset Management debuted a new emerging markets ETF aims that aims to provide exposure to USD denominated sovereign debt across emerging markets.
The JPMorgan USD Emerging Markets Sovereign Bond ETF (JPMB) tracks the JPMorgan Emerging Markets Risk-Aware Bond Index, created by JPMAM’s Quantitative Beta Strategies team and derived from J.P. Morgan’s Corporate & Investment Bank flagship JPMorgan EMBI Global Diversified Index.
The index utilizes a rules-based, three-step process that filters for liquidity, country risk and allocates risk based on credit rating. It invests 80% of its assets in securities included in the underlying index and will rebalance its portfolio on a monthly basis within each country and semi-annually across countries in accordance with the rebalancing of the underlying index.
By using an alternative weighting approach, the index seeks to provide better risk-adjusted returns vs. market cap weighted indexes and potentially generate a competitive yield and lower levels of duration for clients.