JPMorgan Unveils Emerging Markets Bond ETF

JPMorgan Unveils Emerging Markets Bond ETF

New fund offers smart-beta alternative to iShares’ offering.
Reviewed by: Staff
Edited by: Staff

Yesterday, J.P. Morgan rolled out an ETF that targets government-issued debt in the developing world: the JPMorgan USD Emerging Markets Sovereign Bond ETF (JPMB).

The fund comes with an expense ratio of 0.39% and lists on the NYSE Arca exchange.

JPMB tracks the JPMorgan Emerging Markets Risk-Aware Bond Index, which covers sovereign and quasi-sovereign debt, including fixed- and floating-rate securities, issued in emerging markets and denominated in U.S. dollars. The index is derived from a broad emerging market benchmark, and filters that universe based on liquidity and country risk. It relies on credit ratings to allocate risk.

The fund uses an optimization methodology to track its underlying index and can invest without limitation in high-yield debt.

Although there are a number of funds offering takes on the emerging market sovereign debt space, JPMB is priced the same as the iShares JPMorgan USD Emerging Markets Bond ETF (EMB). EMB is the largest fund in the space, at $14.3 billion, and covers strictly sovereign debt. It’s also fairly plain vanilla, while JPMB has a smart-beta twist.

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