Should JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME) Be on Your Investing Radar?
Style Box ETF report for JPME
If you're interested in broad exposure to the Mid Cap Blend segment of the US equity market, look no further than the JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME), a passively managed exchange traded fund launched on 05/11/2016.
The fund is sponsored by J.P. Morgan. It has amassed assets over $230.85 million, making it one of the average sized ETFs attempting to match the Mid Cap Blend segment of the US equity market.
Why Mid Cap Blend
Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus, companies that fall under this category provide a stable and growth-heavy investment.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.24%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.35%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 14.10% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Idexx Laboratories Inc (IDXX) accounts for about 0.47% of total assets, followed by Devon Energy Corp Common (DVN) and Fortinet Inc Common (FTNT).
The top 10 holdings account for about 4.43% of total assets under management.
Performance and Risk
JPME seeks to match the performance of the Russell Midcap Diversified Factor Index before fees and expenses. The Russell Midcap Diversified Factor Index comprises of mid cap US equity securities selected from the Russell Midcap Index. The Index is diversified across the following sectors: financials, technology, consumer services, health care, industrials, consumer goods, energy/ materials and telecommunication/utilities.
The ETF has added about 20.89% so far this year and is up roughly 32.67% in the last one year (as of 10/12/2021). In the past 52-week period, it has traded between $64.48 and $92.14.
The ETF has a beta of 1.07 and standard deviation of 23.45% for the trailing three-year period. With about 373 holdings, it effectively diversifies company-specific risk.
JPMorgan Diversified Return U.S. Mid Cap 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, JPME is a good option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard MidCap ETF (VO) and the iShares Core S&P MidCap ETF (IJH) track a similar index. While Vanguard MidCap ETF has $51.31 billion in assets, iShares Core S&P MidCap ETF has $62.80 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.
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JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME): ETF Research Reports
Devon Energy Corporation (DVN): Free Stock Analysis Report
IDEXX Laboratories, Inc. (IDXX): Free Stock Analysis Report
Fortinet, Inc. (FTNT): Free Stock Analysis Report
iShares Core S&P MidCap ETF (IJH): ETF Research Reports
Vanguard MidCap ETF (VO): ETF Research Reports
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