Larch Capital's ETF Expansion
Larch Capital Expands Portfolio with New Investments in Emerging Markets, Income, and Quality ETFs
Key Points
For its new EEM position, Larch Capital Partners said iShares MSCI Emerging Markets ETF accounts for about 0.5% of its portfolio and is the firm’s 16th-largest holding.
JPMorgan Income ETF (JPIE) was launched on Oct. 28, 2021, and is managed by JPMorgan Chase—details not included in the summary.
Larch’s QUAL stake makes up about 0.3% of its holdings and ranks as the firm’s 20th-largest position; the article also notes QUAL’s benchmark is the MSCI USA Sector Neutral Quality index.
For FPE, Larch Capital Partners reported owning about 0.08% of First Trust Preferred Securities and Income ETF, in addition to the disclosed share count and value.
Larch Capital Partners LLC has taken a new stake in iShares MSCI Emerging Markets ETF (EEM), buying 65,815 shares worth roughly $3.6 million, according to SEC EDGAR filings. The Miami-based multi-family office, which manages about $690 million across 53 holdings, made the move as part of a broader push into four new ETF positions during the fourth quarter.
The EEM purchase makes up 0.5% of Larch's portfolio and ranks as its 16th-largest holding. The firm also added positions in JPMorgan Income ETF (JPIE), iShares MSCI USA Quality Factor ETF (QUAL), and First Trust Preferred Securities and Income ETF (FPE), spending a combined total of roughly $17.7 million across all four funds, MarketBeat reported.
Four New ETF Buys Signal a Barbell Strategy
Larch's largest new purchase was JPIE, an actively managed bond fund launched by JPMorgan Chase on October 28, 2021. The firm bought 140,799 shares worth about $6.55 million. JPIE carries a 5.69% SEC yield and pays out monthly, making it a direct alternative to money market funds, which now yield closer to 3%, according to ETF Trends.
The firm also bought 287,112 shares of FPE, a preferred securities fund, for about $5.23 million. That stake equals roughly 0.08% of FPE's total assets, which stand near $6.3 billion. On the equity side, Larch picked up 11,833 shares of QUAL for $2.35 million. QUAL tracks U.S. large- and mid-cap stocks chosen for strong return on equity, stable earnings, and low debt. It now ranks as Larch's 20th-largest holding at 0.3% of its portfolio, per Zacks Investment Research.
Emerging Markets Bet Comes at a Volatile Moment
Larch's EEM entry follows a strong run for developing-world stocks. Emerging markets beat the S&P 500 by nearly double in 2025, returning 33.6% versus 17%, according to State Street Global Advisors. Analysts at J.P. Morgan say EM economies will keep growing faster than developed markets in 2026, driven by manufacturing and AI hardware demand in South Korea and Taiwan.
But risks are rising fast. Fitch Ratings warned on June 17 that one-third of emerging market sector outlooks are now "deteriorating," up from just 13% in December 2025. The firm blamed geopolitical spillover, including tensions tied to the US-Iran conflict, as a key driver of the downturn. Countries in Asia that rely on Gulf oil imports face the sharpest pressure.
Quality Factor ETFs Draw Investors Fleeing AI Crowding
Larch's QUAL buy fits a wider market shift. Investors are moving money out of crowded AI-focused tech stocks and into companies with steady earnings and clean balance sheets. Zacks Investment Research calls quality-factor funds the "smart choice" for navigating a hawkish Federal Reserve and choppy tech markets. QUAL's benchmark is the MSCI USA Sector Neutral Quality Index.
Institutional buyers are driving much of this move. Heavy participation by hedge funds and other large holders means EEM, in particular, has deep liquidity. That allows firms like Larch to enter or exit positions without moving the price much, according to SEC EDGAR filings tracking institutional ownership. Peer firms including Charles Schwab Investment Management have also piled into JPIE, recently opening a $399.9 million position in the fund.
Larch's Broader Portfolio Leans Hard on Latin America
The four ETF purchases sit alongside a much bigger bet. Larch holds $605.8 million in Nu Holdings, the Brazilian fintech giant, which makes up 83.1% of the firm's entire portfolio, per MarketBeat. The ETF positions act as diversifying anchors around that concentrated core, spreading exposure across income, quality equity, preferred shares, and emerging markets broadly.
Together, the moves suggest Larch is using a barbell approach — pairing a massive single-stock growth bet with a set of diversified, defensive ETF positions. The JPIE and FPE holdings target income. The QUAL stake targets stability. And EEM gives the firm broad access to the same developing-world growth story that already underlies its Nu Holdings position, according to filings reviewed by SEC EDGAR.
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