Launched on February 23, 2016, the Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD Quick QuoteJSMD - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Growth segment of the US equity market.

The fund is sponsored by Janus Henderson. It has amassed assets over $1.05 billion, 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

There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.

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. Further, growth stocks have a higher level of volatility associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.3%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.47%.

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 Industrials sector -- about 28.7% of the portfolio. Information Technology and Healthcare round out the top three.

Looking at individual holdings, Comfort Systems Usa Inc. (FIX) accounts for about 3.79% of total assets, followed by Jabil Inc. (JBL) and Piper Sandler Companies (PIPR).

The top 10 holdings account for about 19.12% 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 has added about 16.97% so far this year and was up about 28.28% in the last one year (as of 05/28/2026). In the past 52-week period, it has traded between $73.91 and $95.32.

The ETF has a beta of 1.15 and standard deviation of 20.61% for the trailing three-year period. With about 122 holdings, it effectively diversifies company-specific risk.

Alternatives

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 reasonable 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) and the Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $14.65 billion in assets, Vanguard Small-Cap Growth Index Fund ETF Shares has $23.56 billion. IWO has an expense ratio of 0.24% and VBK charges 0.05%.

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.