Yahoo Finance Should JPMorgan Diversified Return U.S. Small Cap Equity ETF (JPSE) Be on Your Investing Radar?
The JPMorgan Diversified Return U.S. Small Cap Equity ETF (JPSE) was launched on 11/15/2016, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.
The fund is sponsored by J.P. Morgan. It has amassed assets over $306.21 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.29%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.40%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 14.50% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Celsius Holdings Inc (CELH) accounts for about 0.50% of total assets, followed by Consol Energy Inc Common (CEIX) and Atlas Air Worldwide (AAWW).
The top 10 holdings account for about 4.03% of total assets under management.
Performance and Risk
JPSE seeks to match the performance of the Russell 2000 Diversified Factor Index before fees and expenses. The JP Morgan Diversified Factor US Small 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.
The ETF has lost about -10.23% so far this year and is down about -10.56% in the last one year (as of 11/28/2022). In the past 52-week period, it has traded between $35.20 and $46.65.
The ETF has a beta of 1.13 and standard deviation of 30.05% for the trailing three-year period. With about 581 holdings, it effectively diversifies company-specific risk.
Alternatives
JPMorgan Diversified Return U.S. Small Cap Equity ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, JPSE is a good option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (IWM) and the iShares Core S&P SmallCap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $56.31 billion in assets, iShares Core S&P SmallCap ETF has $68.92 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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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JPMorgan Diversified Return U.S. Small Cap Equity ETF (JPSE): ETF Research Reports
Atlas Air Worldwide Holdings (AAWW) : Free Stock Analysis Report
iShares Russell 2000 ETF (IWM): ETF Research Reports
iShares Core S&P SmallCap ETF (IJR): ETF Research Reports
Consol Energy Inc. (CEIX) : Free Stock Analysis Report
Celsius Holdings Inc. (CELH) : Free Stock Analysis Report
