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Is JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME) a Strong ETF Right Now?
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Launched on 05/11/2016, the JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by J.P. Morgan, JPME has amassed assets over $237.22 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the Russell Midcap Diversified Factor Index.
The Russell Midcap Diversified Factor Index comprises of mid cap US equity securities selected from the Russell Midcap Index. The Index is diversified across the following sectors: financials, technology, consumer services, health care, industrials, consumer goods, energy/ materials and telecommunication/utilities.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.24% for JPME, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.67%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For JPME, it has heaviest allocation in the Consumer Discretionary sector --about 15.50% of the portfolio --while Healthcare and Information Technology round out the top three.
Looking at individual holdings, Jpmorgan Us Var 12/49 accounts for about 0.56% of total assets, followed by Dick's Sporting Goods (DKS - Free Report) and Varian Medical Systems .
JPME's top 10 holdings account for about 4.87% of its total assets under management.
Performance and Risk
So far this year, JPME has lost about -0.18%, and was up about 3.72% in the last one year (as of 11/10/2020). During this past 52-week period, the fund has traded between $42.43 and $71.93.
The ETF has a beta of 1.08 and standard deviation of 22.92% for the trailing three-year period. With about 417 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 MidCap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core SP MidCap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard MidCap ETF has $37.43 billion in assets, iShares Core SP MidCap ETF has $48.22 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?
Launched on 05/11/2016, the JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by J.P. Morgan, JPME has amassed assets over $237.22 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the Russell Midcap Diversified Factor Index.
The Russell Midcap Diversified Factor Index comprises of mid cap US equity securities selected from the Russell Midcap Index. The Index is diversified across the following sectors: financials, technology, consumer services, health care, industrials, consumer goods, energy/ materials and telecommunication/utilities.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.24% for JPME, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.67%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For JPME, it has heaviest allocation in the Consumer Discretionary sector --about 15.50% of the portfolio --while Healthcare and Information Technology round out the top three.
Looking at individual holdings, Jpmorgan Us Var 12/49 accounts for about 0.56% of total assets, followed by Dick's Sporting Goods (DKS - Free Report) and Varian Medical Systems .
JPME's top 10 holdings account for about 4.87% of its total assets under management.
Performance and Risk
So far this year, JPME has lost about -0.18%, and was up about 3.72% in the last one year (as of 11/10/2020). During this past 52-week period, the fund has traded between $42.43 and $71.93.
The ETF has a beta of 1.08 and standard deviation of 22.92% for the trailing three-year period. With about 417 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 MidCap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core SP MidCap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard MidCap ETF has $37.43 billion in assets, iShares Core SP MidCap ETF has $48.22 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.