Is JPMorgan Diversified Return International Equity ETF (JPIN) a Strong ETF Right Now?

Zacks Equity Research
·4-min read

The JPMorgan Diversified Return International Equity ETF (JPIN) was launched on 11/06/2014, and is a smart beta exchange traded fund designed to offer broad exposure to the World ETFs category of the market.

What Are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

JPIN is managed by J.P. Morgan, and this fund has amassed over $387 million, which makes it one of the average sized ETFs in the World ETFs. JPIN seeks to match the performance of the FTSE Developed ex North America Diversified Factor Index before fees and expenses.

The JP Morgan Diversified Factor International Equity Index utilizes a rules-based approach combining risk-weighted portfolio construction with multi-factor security screening based on value, quality and momentum factors.

Cost & Other Expenses

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.37%, making it on par with most peer products in the space.

JPIN's 12-month trailing dividend yield is 3.87%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Taking into account individual holdings, Sembcorp Industries Ltd (SCI) accounts for about 0.58% of the fund's total assets, followed by Sk Hynix Inc Common (A000660) and Kansai Electric Power Co (9503.T).

JPIN's top 10 holdings account for about 4.89% of its total assets under management.

Performance and Risk

The ETF has added roughly 7.71% so far this year and is up about 8.41% in the last one year (as of 08/24/2023). In the past 52-week period, it has traded between $42.35 and $54.21.

The ETF has a beta of 0.80 and standard deviation of 15.06% for the trailing three-year period, making it a medium risk choice in the space. With about 469 holdings, it effectively diversifies company-specific risk.

Alternatives

JPMorgan Diversified Return International Equity ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

Vanguard Total International Stock ETF (VXUS) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $56.92 billion in assets, Vanguard FTSE Developed Markets ETF has $111.89 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

JPMorgan Diversified Return International Equity ETF (JPIN): ETF Research Reports

Service Corporation International (SCI) : Free Stock Analysis Report

Vanguard FTSE Developed Markets ETF (VEA): ETF Research Reports

Vanguard Total International Stock ETF (VXUS): ETF Research Reports

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