Looking for broad exposure to the Small Cap Growth segment of the US equity market? You should consider the Janus Henderson Small/Mid Cap Growth Alpha ETF (
JSMD Quick Quote JSMD - Free Report) , a passively managed exchange traded fund launched on 02/23/2016.
The fund is sponsored by Janus Henderson. It has amassed assets over $200.17 million, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.
Why Small Cap Growth
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.
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 0.30%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.40%.
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 25.70% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Shockwave Medical Inc. (
SWAV Quick Quote SWAV - Free Report) accounts for about 3.33% of total assets, followed by Fair Isaac Corporation ( FICO Quick Quote FICO - Free Report) and Repligen Corporation ( RGEN Quick Quote RGEN - Free Report) .
The top 10 holdings account for about 24.96% of total assets under management.
Performance and Risk
JSMD seeks to match the performance of the Janus Small/Mid Cap Growth Alpha Index before fees and expenses. The Janus Henderson Small/Mid Cap Growth Alpha Index selects small- and medium-sized capitalization stocks that are poised for smart growth by evaluating each company performance in three critical areas: growth, profitability, and capital efficiency.
The ETF return is roughly 15.43% so far this year and was up about 6.89% in the last one year (as of 06/08/2023). In the past 52-week period, it has traded between $47.84 and $60.26.
The ETF has a beta of 1.17 and standard deviation of 24.04% for the trailing three-year period. With about 243 holdings, it effectively diversifies company-specific risk.
Janus Henderson Small/Mid Cap Growth Alpha 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, JSMD is a sufficient option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 Growth ETF (
IWO Quick Quote IWO - Free Report) and the Vanguard Small-Cap Growth ETF ( VBK Quick Quote VBK - Free Report) track a similar index. While iShares Russell 2000 Growth ETF has $9.89 billion in assets, Vanguard Small-Cap Growth ETF has $13.78 billion. IWO has an expense ratio of 0.23% and VBK charges 0.07%. Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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.