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Is Janus Henderson Small Cap Growth Alpha ETF (JSML) a Strong ETF Right Now?

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Launched on 02/23/2016, the Janus Henderson Small Cap Growth Alpha ETF (JSML - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Growth category of the market.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

JSML is managed by Janus Henderson, and this fund has amassed over $217.14 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the Janus Small Cap Growth Alpha Index.

The Janus Henderson Small Cap Growth Alpha Index selects small-sized capitalization stocks that are poised for smart growth by evaluating each company performance in three critical areas: growth, profitability, and capital efficiency.

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.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.30%.

The fund has a 12-month trailing dividend yield of 0.47%.

Sector Exposure and Top Holdings

ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector - about 27.80% of the portfolio. Healthcare and Information Technology round out the top three.

Looking at individual holdings, Corvel Corporation (CRVL) accounts for about 3.67% of total assets, followed by Corcept Therapeutics Incorporated. (CORT - Free Report) and Doximity Inc. Class A (DOCS - Free Report) .

JSML's top 10 holdings account for about 23.68% of its total assets under management.

Performance and Risk

Year-to-date, the Janus Henderson Small Cap Growth Alpha ETF return is roughly 5.53% so far, and it's up approximately 16.19% over the last 12 months (as of 08/21/2024). JSML has traded between $47.39 and $64.81 in this past 52-week period.

JSML has a beta of 1.26 and standard deviation of 25.40% for the trailing three-year period. With about 213 holdings, it effectively diversifies company-specific risk.

Alternatives

Janus Henderson Small Cap Growth Alpha ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.

IShares Russell 2000 Growth ETF (IWO - Free Report) tracks Russell 2000 Growth Index and the Vanguard Small-Cap Growth ETF (VBK - Free Report) tracks CRSP U.S. Small Cap Growth Index. IShares Russell 2000 Growth ETF has $11.49 billion in assets, Vanguard Small-Cap Growth ETF has $17.31 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.

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 - Small Cap Growth.

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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