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Is JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME) a Strong ETF Right Now?
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The JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME - Free Report) made its debut on 05/11/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by J.P. Morgan. It has amassed assets over $369.73 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Russell Midcap Diversified Factor Index.
The JP Morgan Diversified Factor US Mid Cap Equity Index utilizes a rules-based approach that combines risk-based portfolio construction with multi-factor security selection, including value, quality and momentum factors.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.24%, making it on par with most peer products in the space.
JPME's 12-month trailing dividend yield is 1.78%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For JPME, it has heaviest allocation in the Industrials sector --about 12.10% of the portfolio --while Healthcare and Real Estate round out the top three.
When you look at individual holdings, Williams-Sonoma Inc (WSM - Free Report) accounts for about 0.47% of the fund's total assets, followed by Celsius Holdings Inc (CELH - Free Report) and Dick's Sporting Goods (DKS - Free Report) .
Its top 10 holdings account for approximately 4.42% of JPME's total assets under management.
Performance and Risk
The ETF has gained about 4.17% so far this year and is up roughly 13.45% in the last one year (as of 06/12/2024). In the past 52-week period, it has traded between $79.30 and $99.14.
The ETF has a beta of 1.04 and standard deviation of 16.82% for the trailing three-year period. With about 369 holdings, it effectively diversifies company-specific risk.
Alternatives
JPMorgan Diversified Return U.S. Mid Cap Equity ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Mid-Cap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $63.56 billion in assets, iShares Core S&P Mid-Cap ETF has $82.11 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME) a Strong ETF Right Now?
The JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME - Free Report) made its debut on 05/11/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by J.P. Morgan. It has amassed assets over $369.73 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the Russell Midcap Diversified Factor Index.
The JP Morgan Diversified Factor US Mid Cap Equity Index utilizes a rules-based approach that combines risk-based portfolio construction with multi-factor security selection, including value, quality and momentum factors.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.24%, making it on par with most peer products in the space.
JPME's 12-month trailing dividend yield is 1.78%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For JPME, it has heaviest allocation in the Industrials sector --about 12.10% of the portfolio --while Healthcare and Real Estate round out the top three.
When you look at individual holdings, Williams-Sonoma Inc (WSM - Free Report) accounts for about 0.47% of the fund's total assets, followed by Celsius Holdings Inc (CELH - Free Report) and Dick's Sporting Goods (DKS - Free Report) .
Its top 10 holdings account for approximately 4.42% of JPME's total assets under management.
Performance and Risk
The ETF has gained about 4.17% so far this year and is up roughly 13.45% in the last one year (as of 06/12/2024). In the past 52-week period, it has traded between $79.30 and $99.14.
The ETF has a beta of 1.04 and standard deviation of 16.82% for the trailing three-year period. With about 369 holdings, it effectively diversifies company-specific risk.
Alternatives
JPMorgan Diversified Return U.S. Mid Cap Equity ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Mid-Cap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $63.56 billion in assets, iShares Core S&P Mid-Cap ETF has $82.11 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.