JP Morgan has launched a new actively managed ETF aimed at investors seeking low-cost access to emerging market equities while maintaining the potential for alpha generation.
JP Morgan has introduced an actively managed emerging markets ETF designed to serve as a core portfolio holding.
The JPMorgan Emerging Markets Equity Core ETF (JEMA US) has listed on Cboe BZX Exchange and comes to market with around $25 million in assets.
The fund is managed by Anuj Arora and Joyce Weng, who collectively have 32 years of financial industry experience including 27 at JP Morgan.
Anuj Arora, Managing Director, is a portfolio manager based in London within the Emerging Markets and Asia Pacific (EMAP) equities team. He is the head of the Global Emerging Markets (GEM) Core team.
Joyce Weng, Executive Director, is a portfolio manager covering the GEM Core strategies within the EMAP equities team. She is based in New York.
The fund seeks long-term capital growth exceeding the return on the MSCI Emerging Markets Index while maintaining similar risk characteristics to the benchmark.
JP Morgan’s definition of emerging market companies extends beyond securities listed on non-developed exchanges to include any firm that conducts the majority of its business in, derives the majority of its revenue from, or has the majority of its assets within emerging markets.
Eligible types of securities include common stock, participation instruments, and other structured notes. The fund may also invest in third-party ETFs to gain access to a specific market.
While the fund diversifies across many emerging market countries, it is expected to have significant exposure to investments in South Korea, India, and China.
JP Morgan utilizes a proprietary top-down multi-factor model to quantitatively rank emerging market countries and inform portfolio allocation.
Security selection is then driven by bottom-up research which harnesses fundamental and quantitative inputs, as well as the expertise of JP Morgan’s network of local country analysts, to identify companies with the highest prospect for long-term growth.
ESG risks are also considered when selecting investments, although the ETF’s prospectus notes that ESG analysis, by itself, does not determine whether a stock is included or omitted from the portfolio.
The ETF comes with an expense ratio of 0.33% which is relatively inexpensive compared to other actively managed emerging market funds.