IEMB
iShares J.P. Morgan $ EM Bond UCITS ETF USD (Dist)
Published by Radif Partners · Updated
Overview
iShares J.P. Morgan $ EM Bond UCITS ETF USD (Dist) (IEMB) tracks the J.P. Morgan EMBI Global Core index and holds its constituents directly, a physical replication managed by iShares. Dividends are paid out to holders rather than reinvested, so IEMB suits investors seeking regular income. The fund is domiciled in IE, which determines the withholding tax treatment applied to its dividends. Annual charges come to 0.45% of assets, and the fund holds 6.8B under management. Over five years the fund returned -4.1% a year on average, against 3.4% over three years. It is not eligible for the French PEA, but can be held in a securities account, a UK ISA or a German Depot. Its risk level is rated medium. Launched on 2008-02-15, the fund is denominated in USD and has 18 years of track record. It is a UCITS fund, so it follows the European framework on diversification, liquidity and asset segregation. Because IEMB distributes, every payment is taxable in the year it is received, against the dividend allowance in a general account, while it stays sheltered inside an ISA or a SIPP. Domicile in IE sets the withholding the fund itself suffers on the dividends it receives, a cost absent from the stated fee but present in the return.
At 0.45%, this fund costs more than twice the median of its category (0.10%) and over 15.0 times the cheapest (0.03%). On £10,000 the gap to the median is worth about 350 over ten years, and that difference is certain in a way no performance gap is. A premium can be justified, by an index no competitor tracks, by a useful trading currency, or by size that guarantees liquidity; it is not justified by the brand. The question is therefore plain: what does this fund offer that the cheapest on the list does not?
Replication is physical: the fund actually holds the constituents of J.P. Morgan EMBI Global Core, which makes its contents verifiable line by line in the issuer's report. Two points deserve attention. Securities lending first, practised by most physical funds to reduce costs: it earns a few hundredths of a point and creates an exposure to the borrower, covered by collateral, with the annual report stating the proportion lent. Rebalancing second: every change in the index's composition forces the fund to buy and sell, and those internal costs are not in the 0.45% headline. That is why two funds at the same price do not track their index with the same fidelity.
The domicile, Ireland, is not an administrative detail: it determines the withholding tax the fund suffers on the dividends it receives, and that loss appears in no fee table. On US equities, the Ireland-US treaty cuts withholding from thirty to fifteen per cent, which on a world index is mechanically worth several tenths of a point a year and explains Irish dominance of this segment. For the holder, the UCITS framework also brings the key information document in their own language, diversification rules, and separation of the fund's assets from the issuer's.
Income is distributed: the fund pays out the dividends it receives, usually one to four times a year. For a holder living off the portfolio that is what is wanted, since the income arrives without selling. For someone still accumulating it is a tax disadvantage in a taxable account: each payment is taxed in the year received, so the amount reinvested is reduced before it starts working again. Reinvesting by hand also costs a dealing commission each time and often leaves cash idle for want of the price of a whole unit. An accumulating class on the same index, where one exists, settles the question.
With 6.8 billion in assets and 18 years of history, this fund has the size and the record that make closure unlikely and the spread narrow. Three checks remain, once a year, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of J.P. Morgan EMBI Global Core, which can change its selection or weighting rules without the fund's name moving, in which case what you hold has changed with nothing to announce it.
J.P. Morgan EMBI Global Core tracks a bond market, which changes the question: the return on a bond portfolio is largely known in advance, as yield to maturity, while its market value moves with rates and with the risk premium demanded of issuers. Two figures govern this fund, duration and average credit quality, and neither appears in an annual return. On corporate credit, correlation with equities rises precisely when protection was expected.
Over one year the fund shows -5.4% and over five years -4.1% annualised, two figures close together, which is the most ordinary and least informative configuration: it does not say the fund is steady, only that the chosen start and end points resemble each other. Comparing these figures with another fund means something only if the index is the same; otherwise it is an index comparison dressed as a fund comparison.
0.45%
6.8B
6,800M USDMedium
5,827
Physical
Distributing
USD
IE
J.P. Morgan EMBI Global Core
iShares
2008-02-15 (18 years)
Contextual Analysis
Fund Size
With 6.8B in assets, this is a large fund, good liquidity and tight spreads.
Fee Positioning
A TER of 0.45% is above the market average (~0.35%), justified if the strategy is specialized.
Track Record
Launched in 2008-02-15, this fund has 18 years of history, long and reliable track record.
Risk Profile
Medium risk, good risk/return balance for a 5+ year horizon.
Performance
Returns Summary
| Period | Ann. Return | Cumulative |
|---|---|---|
| 1 Month (est.) | – | -0.5% |
| 3 Months (est.) | – | -1.4% |
| 6 Months (est.) | – | -2.7% |
| YTD (est.) | – | -2.3% |
| 1 Year | -5.4% | -5.4% |
| 3 Years | +3.4% | +10.6% |
| 5 Years | -4.1% | -18.9% |
| Since inception (18y) | -2.0% | -30.7% |
Key Facts
Fund Profile
Themes & Zones
Holdings
Risk
How to Buy This ETF
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About this ETF
The iShares J.P. Morgan $ EM Bond UCITS ETF USD (Dist) tracks the J.P. Morgan EMBI Global Core index. It is managed by iShares using physical replication and follows a distributing distribution policy. The fund is denominated in USD and domiciled in IE. It has a total expense ratio (TER) of 0.45%.
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Frequently asked questions
What do IEMB's 0.45% charges actually cost?
They are taken from the fund's value continuously and never billed separately: on £1,000 invested that is about £4.50 a year and roughly £45 over ten years at a constant amount. That is the only cost of the fund itself. Your broker's commission and the spread between buying and selling price come on top, and they weigh most on small frequent purchases.
What should you re-check on IEMB once a year?
Three things, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of J.P. Morgan EMBI Global Core, which can change its selection or weighting rules without the fund's name moving: in that case what you hold has changed with nothing to announce it.
Does IEMB lend out the securities it holds?
Probably in part: most physical funds lend securities to reduce their costs, and iShares publishes the proportion in the annual report. Lending income is worth a few hundredths of a point, shared between the fund and the issuer. The risk is the borrower's, covered by collateral worth more than the amount lent, and it appears in the prospectus rather than in the stated fee.
Why does IEMB's Irish domicile matter?
Because it determines the withholding tax the fund suffers on the dividends it receives, and that loss appears in no fee table. The Ireland-US treaty cuts withholding from thirty to fifteen per cent on US equities, mechanically worth several tenths of a point a year on a world index. The UCITS framework also brings the key information document in your own language.
Does IEMB pay dividends?
Yes: the fund distributes and pays out the dividends it receives, on a calendar set by iShares. The payment is taxable in the year you receive it in most accounts, even if reinvested at once, and reinvesting by hand costs a commission each time. An accumulating class on the same index avoids that friction for anyone who does not need the income.
This ranking is for informational purposes only and does not constitute a recommendation to buy or sell any security. Displayed performance is simulated.