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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) was launched on 05/11/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
Managed by J.P. Morgan, JPME has amassed assets over $254.60 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. Before fees and expenses, JPME 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for JPME are 0.24%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.53%.
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.
Representing 12.50% of the portfolio, the fund has heaviest allocation to the Materials sector; Information Technology and Healthcare round out the top three.
When you look at individual holdings, Coterra Energy Inc (CTRA - Free Report) accounts for about 0.93% of the fund's total assets, followed by Marathon Oil Corp Common (MRO - Free Report) and Devon Energy Corp Common (DVN - Free Report) .
JPME's top 10 holdings account for about 5.41% of its total assets under management.
Performance and Risk
The ETF has lost about -4.10% so far this year and was up about 4.46% in the last one year (as of 05/31/2022). In the past 52-week period, it has traded between $84.50 and $95.75.
The ETF has a beta of 1.02 and standard deviation of 23.93% for the trailing three-year period. With about 365 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 S&P MidCap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard MidCap ETF has $51.53 billion in assets, iShares Core S&P MidCap ETF has $62.46 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) was launched on 05/11/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
Managed by J.P. Morgan, JPME has amassed assets over $254.60 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. Before fees and expenses, JPME 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for JPME are 0.24%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.53%.
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.
Representing 12.50% of the portfolio, the fund has heaviest allocation to the Materials sector; Information Technology and Healthcare round out the top three.
When you look at individual holdings, Coterra Energy Inc (CTRA - Free Report) accounts for about 0.93% of the fund's total assets, followed by Marathon Oil Corp Common (MRO - Free Report) and Devon Energy Corp Common (DVN - Free Report) .
JPME's top 10 holdings account for about 5.41% of its total assets under management.
Performance and Risk
The ETF has lost about -4.10% so far this year and was up about 4.46% in the last one year (as of 05/31/2022). In the past 52-week period, it has traded between $84.50 and $95.75.
The ETF has a beta of 1.02 and standard deviation of 23.93% for the trailing three-year period. With about 365 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 S&P MidCap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard MidCap ETF has $51.53 billion in assets, iShares Core S&P MidCap ETF has $62.46 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.