JP Morgan to cut China, India shares in flagship emerging-market index.

Sept 2025 : The weighting reduction will divert investor flows from countries such as China and India towards smaller nations. 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 09% from 10% 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 09%, with a more balanced regional exposure that decreases the concentration risk and enhances the headline index yield. Investors were supportive of evaluating the suitability of further reductions in the country cap”. the client notice said.

A JPMorgan representative declined to comment. Media Houses have reported that the bank had been soliciting feedback from clients on a change to the issuer cap earlier this year. JPMorgan’s index is the main benchmark for developing-nation debt and is followed by funds managing more than US$200 billion. Changes to its composition impact global investment flows, such as when Chinese bonds were phased into the benchmark in 2020 and when Indian debt was added last year.

Last Friday, JPMorgan also placed Saudi Arabia and the Philippines on watch for possible inclusion in the benchmark gauge for local debt, citing market reforms implemented by both nations over the past few years. Estimated weightings would be about 02% and 01%, respectively if they were added, the bank said.

Team Maverick