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Should JPMorgan Diversified Return U.S. Equity ETF (JPUS) Be on Your Investing Radar?

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If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the JPMorgan Diversified Return U.S. Equity ETF (JPUS - Free Report) , a passively managed exchange traded fund launched on 09/29/2015.

The fund is sponsored by J.P. Morgan. It has amassed assets over $472.85 M, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.

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 0.19%, making it one of the cheaper products in the space.

It has a 12-month trailing dividend yield of 1.55%.

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.

This ETF has heaviest allocation to the Healthcare sector--about 16.20% of the portfolio. Consumer Discretionary and Information Technology round out the top three.

Looking at individual holdings, Dr Pepper Snapple Group accounts for about 0.60% of total assets, followed by Cms Energy Corp Common (CMS - Free Report) and Xcel Energy Inc Common (XEL - Free Report) .

The top 10 holdings account for about 5.7% of total assets under management.

Performance and Risk

JPUS seeks to match the performance of the Russell 1000 Diversified Factor Index before fees and expenses. The Russell 1000 Diversified Factor Index comprises of U.S. equity securities selected to represent a diversified set of factor characteristics, originally developed by the adviser.

The ETF has gained about 0.39% so far this year and was up about 14.09% in the last one year (as of 04/20/2018). In the past 52-week period, it has traded between $63.10 and $74.58.

The ETF has a beta of 0.94 and standard deviation of 11.34% for the trailing three-year period, making it a medium risk choice in the space. With about 524 holdings, it effectively diversifies company-specific risk.

Alternatives

JPMorgan Diversified Return U.S. 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, JPUS is a good option for those seeking exposure to the Large Cap ETFs area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Core S&P 500 ETF (IVV - Free Report) and the SPDR S&P 500 ETF (SPY - Free Report) track a similar index. While iShares Core S&P 500 ETF has $142.85 B in assets, SPDR S&P 500 ETF has $258.18 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.

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.