JPMorgan To Trim China, India Share In Flagship EM Bond Index
JPMorgan Chase & Co. will cut the weight of the largest bond issuers in its flagship emerging-market index, diverting investor flows from the likes of China and India toward smaller nations.
The Wall Street bank will gradually lower the issuer cap on its GBI-EM Global Diversified index in the first half of 2026, according to a client notice seen by Bloomberg. The limit will fall to 9% from 10% currently, with the implementation to be phased over a period of several months, the documents dated Friday said.
A JPMorgan spokesperson did not immediately respond to requests for comment.
JPMorgan's index is the main benchmark for developing-nation debt funds, and changes to its composition impact global investment flows. The bank's index arm had been soliciting feedback from clients on such a change earlier this year.
The weighting reduction will affect the largest bond sellers in emerging markets, including Indonesia, Mexico and Malaysia, as well as China and India. Thailand, Poland, South Africa and Brazil are among the biggest beneficiaries.
“Investors highlighted the benefits of lowering the diversification threshold to 9%, with a more balanced regional exposure that decreases the concentration risk and enhances the headline index yield,” JPMorgan said in the notice.
Chinese bonds were phased into JPMorgan's indexes in 2020 while Indian debt was added last year.
On Friday, JPMorgan also placed Saudi Arabia and the Philippines on watch for possible inclusion into the benchmark gauge for local debt, citing market reforms implemented by both nations over the past few years. Estimated weightings would be about 2% and 1%, respectively, if they were added, the bank said.
Bloomberg LP, the parent company of Bloomberg News, also offers index products for various asset classes through Bloomberg Index Services Ltd.
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