JPMorgan Emerging Markets Research Enhanced Index Equity Fund nearly trebled its net assets in 2026 after attracting $48.5 million of applications and recording a $4.6 million profit. The growth came with a sharp increase in exposure to one underlying emerging markets ETF.
- Operating profit rose to A$4.633 million from A$471,000
- Net assets increased to A$49.001 million
- Applications totalled A$48.498 million, partly offset by A$7.817 million of redemptions
- All A$48.640 million of listed investments were held in one JPMorgan ETF
- No distributions were paid or payable during the year
Applications drive a tenfold increase in fund assets
JPMorgan Emerging Markets Research Enhanced Index Equity Fund (ASX:JEM) ended the year with A$49.001 million in net assets, up from A$3.687 million a year earlier. The change was driven primarily by A$48.498 million of new applications, although A$7.817 million of redemptions trimmed the net inflow.
The fund also reported an operating profit of A$4.633 million for the year ended 30 June 2026, compared with A$471,000 in 2025. That result was dominated by a A$4.637 million net gain on financial instruments at fair value through profit or loss, rather than recurring operating income. The accounts therefore show a strong year for the portfolio’s reported value, but do not establish how much of that gain was realised or provide a unit-price return against the fund’s benchmark.
One ETF accounts for the entire investment portfolio
At year-end, JEM held A$48.640 million in listed unit trusts, all invested in the JPMorgan ETFs (Ireland) ICAV Global Emerging Markets Research Enhanced Index Equity ESG UCITS ETF. The holding represented 100% of the fund’s financial assets measured at fair value and 99.3% of total assets, with the balance mostly held in cash and receivables.
That structure gives investors a concentrated route into the underlying ETF’s emerging markets portfolio rather than a portfolio of separately selected securities inside JEM. The annual report records the investment as a Level 1 asset with a quoted market price, while also making clear that the fund is directly exposed to equity-price and foreign-exchange movements. JPMorgan Asset Management (Australia) Limited held 298,000 JEM units at year-end, worth A$26.030 million and representing 52.28% of units on issue, up from 20,000 units a year earlier.
Risk sensitivity rises with the fund’s larger scale
The report’s sensitivity analysis illustrates the leverage of market movements on the enlarged asset base. A 21% increase or decrease in the MSCI Emerging Market Index was estimated to change JEM’s operating profit and net assets by A$10.214 million in either direction. A 10% movement in the US dollar was estimated to have an A$4.853 million impact, reflecting the fund’s reported US-dollar exposure.
JEM paid no distribution during the year. Its management costs were A$178,499, offset by A$172,952 of reimbursements, leaving net management costs of A$5,547; the underlying ETF also charges an estimated investment management fee of 0.30% a year, reflected in its unit price. PricewaterhouseCoopers issued an unmodified audit opinion, and the report identified no post-year-end event that had significantly affected the fund.
Bottom Line?
The next test is whether JEM’s much larger asset base persists without leaving investors exposed to an equally large reversal in emerging markets or currency markets.
Questions in the middle?
- Can the strong application inflow be sustained after the fund’s rapid expansion in 2026?
- How did JEM’s unit-price performance compare with the MSCI Emerging Market Index and the underlying ETF?
- Will the fund maintain its concentrated single-ETF structure and high exposure to US-dollar assets?