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A smart beta exchange traded fund, the JPMorgan Diversified Return International Equity ETF (JPIN) debuted on 11/06/2014, and offers broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by J.P. Morgan, and has been able to amass over $849.25 million, which makes it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the FTSE Developed ex North America Diversified Factor Index.
The FTSE Developed ex North America Diversified Factor Index is designed to reflect the performance of stocks representing a diversified set of factor characteristics. Constituents are selected based on a composite factor score like Value, Volatility, Price, Momentum and Size characteristics.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.37% for JPIN, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.85%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Kakao Corp Common Stock (A035720) accounts for about 0.52% of total assets, followed by Astrazeneca Plc Common (AZN) and Auto Trader Group Plc (AUTO).
Its top 10 holdings account for approximately 4.44% of JPIN's total assets under management.
Performance and Risk
The ETF has added roughly 7.52% so far this year and was up about 21.81% in the last one year (as of 10/20/2021). In the past 52-week period, it has traded between $49.86 and $64.56.
The fund has a beta of 0.81 and standard deviation of 20.05% for the trailing three-year period, which makes JPIN a medium risk choice in this particular space. With about 473 holdings, it effectively diversifies company-specific risk.
JPMorgan Diversified Return International Equity ETF is a reasonable option for investors seeking to outperform the Broad Developed 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 $51.63 billion in assets, Vanguard FTSE Developed Markets ETF has $105.60 billion. VXUS has an expense ratio of 0.08% 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 Broad Developed World ETFs.
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.
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JPMorgan Diversified Return International Equity ETF (JPIN): ETF Research Reports
AstraZeneca PLC (AZN) : Free Stock Analysis Report
Vanguard FTSE Developed Markets ETF (VEA): ETF Research Reports
Vanguard Total International Stock ETF (VXUS): ETF Research Reports
AutoWeb, Inc. (AUTO) : Free Stock Analysis Report
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