JPMorgan Chase plans to reduce the weight of China and India in its flagship emerging market bond index

JP Morgan will reduce the weight of the largest bond issuing countries in its flagship emerging markets index, directing investment flows away from large countries like China and India to smaller economies. According to a client notice dated last Friday, which Bloomberg has seen, JP Morgan will gradually lower the single issuance cap in the GBI-EM Global Diversified index from the current 10% to 9% in the first half of 2026, with the implementation process to be phased over several months. This weight reduction will affect several of the largest bond issuing countries in emerging markets, including Indonesia, Mexico, Malaysia, China, and India. Thailand, Poland, South Africa, and Brazil are the main beneficiaries of this adjustment. JP Morgan stated in the notice: "Investors view lowering the diversification threshold to 9% positively, as it can lead to a more balanced regional exposure, reduce concentration risk, and enhance overall index returns."