J.P. Morgan Set to Boost Private Investment in Emerging Markets Projects

Global banking and investment firm J.P. Morgan is looking to delve deeper into the emerging markets (EM) space after it announced on Tuesday that it would boost private investment in EM projects to the tune of $100 billion.

Per a CNBC article, JP Morgan is looking to “finance more than $100 billion annually from its investment bank and created a formal methodology to define projects that fit commercial and development targets. It also hired Faheen Allibhoy, an 18-year veteran of the World Bank-affiliated International Finance Corp., to lead the new group.”

“The emerging markets are where the action is,” Allibhoy told CNBC, citing Indonesia, Turkey, Mexico, and Egypt as “countries that are building infrastructure and that are in need of capital, and they’re sizable economies.”

For emerging markets exposure, one fund to check out is the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO), which is up 15% within the past year based on Yahoo Finance performance figures.

VWO employs an indexing investment approach designed to track the performance of the FTSE Emerging Markets All Cap China A Inclusion Index. It invests by sampling the index, meaning that it holds a broadly diversified collection of securities that, in the aggregate, approximates the index in terms of key characteristics.

Other funds have also been rising since the deal, such as the iShares MSCI Emerging Markets ETF (NYSEArca: EEM). The fund is up almost 1% to start 2020 and about 12.8% the past year.

EEM seeks to track the investment results of the MSCI Emerging Markets Index. The fund generally invests at least 90% of its assets in the securities of its underlying index and in depositary receipts representing securities in its underlying index. The index is designed to measure equity market performance in the global emerging markets. The underlying index will include large- and mid-capitalization companies and may change over time.

Relative Value EM Play

For investors looking for the continued upside in emerging market assets, whether driven by a weakening USD or continued developments around trade, the Direxion MSCI Emerging Over Developed Markets ETF (NYSEArca: RWED) offers them the ability to benefit not only from emerging markets potentially performing well, but from emerging markets outperforming developed markets.

RWED seeks investment results that track the MSCI Emerging Markets IMI – EAFE IMI 150/50 Return Spread Index. The Index measures the performance of a portfolio that has 150 percent long exposure to the MSCI Emerging Markets IMI Index and 50 percent short exposure to the MSCI EAFE IMI Index.

For more relative market trends, visit our Relative Value Channel.