JPMorgan Chase 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 towards 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 per cent from 10 per cent currently, with the implementation to be phased over a period of several months, the documents dated Friday said.
The weighting reduction will affect some of 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 per cent, with a more balanced regional exposure that decreases the concentration risk and enhances the headline index yield,” the client notice said.
“Investors were supportive of evaluating the suitability of further reductions in the country cap.”
