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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) made its debut on 05/11/2016, and is a smart beta exchange traded fund that provides 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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by J.P. Morgan, JPME has amassed assets over $397.67 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. This particular fund seeks to match the performance of the Russell Midcap Diversified Factor Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
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 1.76%.
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.
JPME's heaviest allocation is in the Healthcare sector, which is about 11.70% of the portfolio. Its Real Estate and Industrials round out the top three.
When you look at individual holdings, Ciena Corp Common Stock (CIEN - Free Report) accounts for about 0.49% of the fund's total assets, followed by Tapestry Inc Common (TPR - Free Report) and Davita Inc Common Stock (DVA - Free Report) .
JPME's top 10 holdings account for about 4.58% of its total assets under management.
Performance and Risk
Year-to-date, the JPMorgan Diversified Return U.S. Mid Cap Equity ETF has gained about 0.60% so far, and is up roughly 11.52% over the last 12 months (as of 02/28/2025). JPME has traded between $92.68 and $110.92 in this past 52-week period.
The ETF has a beta of 1.05 and standard deviation of 16.32% for the trailing three-year period. With about 356 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 Mid-Cap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $73.86 billion in assets, iShares Core S&P Mid-Cap ETF has $93.73 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) made its debut on 05/11/2016, and is a smart beta exchange traded fund that provides 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.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by J.P. Morgan, JPME has amassed assets over $397.67 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. This particular fund seeks to match the performance of the Russell Midcap Diversified Factor Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
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 1.76%.
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.
JPME's heaviest allocation is in the Healthcare sector, which is about 11.70% of the portfolio. Its Real Estate and Industrials round out the top three.
When you look at individual holdings, Ciena Corp Common Stock (CIEN - Free Report) accounts for about 0.49% of the fund's total assets, followed by Tapestry Inc Common (TPR - Free Report) and Davita Inc Common Stock (DVA - Free Report) .
JPME's top 10 holdings account for about 4.58% of its total assets under management.
Performance and Risk
Year-to-date, the JPMorgan Diversified Return U.S. Mid Cap Equity ETF has gained about 0.60% so far, and is up roughly 11.52% over the last 12 months (as of 02/28/2025). JPME has traded between $92.68 and $110.92 in this past 52-week period.
The ETF has a beta of 1.05 and standard deviation of 16.32% for the trailing three-year period. With about 356 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 Mid-Cap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $73.86 billion in assets, iShares Core S&P Mid-Cap ETF has $93.73 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.