JPMorgan Chase & Co., commonly known as JPMorgan, will reduce the weights of China and India in its emerging market bond index, meaning that investors’ funds will partly flow to other emerging market countries.
According to a report by Bloomberg on Monday (September 15th), JPMorgan Chase will gradually decrease the issuer cap of the Bloomberg Barclays Global Emerging Markets Diversified Bond Index (GBI-EM Global Diversified Index) in the first half of 2026. The document released last Friday (12th) stated that the issuer cap will be lowered from the current 10% to 9%, and this reduction will be implemented in stages over several months.
A spokesperson for JPMorgan Chase has not immediately responded to Bloomberg’s request for comment.
This move will directly affect the allocation of funds in index-tracking investment products such as ETFs or funds.
JPMorgan’s GBI-EM index is a core tool for investing in emerging market bonds, used by investors for benchmarking, asset allocation, and risk management. Therefore, reducing the issuer cap will impact global investment flows. The bank’s index division had earlier sought extensive customer feedback on this change.
Bloomberg stated that the reduction in weights will affect the largest bond-issuing countries in emerging markets, including Indonesia, Mexico, and Malaysia, as well as China and India. Thailand, Poland, South Africa, and Brazil are expected to be the major beneficiaries of this adjustment.
In the notification, JPMorgan Chase stated, “Investors have emphasized the benefits of lowering the diversification threshold to 9%, which can reduce concentration risk and increase the overall index yield through a more balanced regional investment.”
Chinese bonds were phased into JPMorgan’s index in 2020, while Indian bonds were included in 2024.
JPMorgan Chase also added Saudi Arabia and the Philippines to the watchlist for potential inclusion, citing market reforms implemented by these two countries in recent years. If these two countries are included, the expected weights will be approximately 2% and 1% respectively.