Should Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD) Be on Your Investing Radar?
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), a passively managed exchange traded fund launched on 02/23/2016.
The fund is sponsored by Janus Henderson. It has amassed assets over $253.98 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
Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Also, growth stocks are a type of equity that carries more risk compared to others. 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.
Costs
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 0.43%.
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 26.60% of the portfolio. Healthcare and Industrials round out the top three.
Looking at individual holdings, Shockwave Medical, Inc. (SWAV) accounts for about 4.11% of total assets, followed by Fair Isaac Corporation (FICO) and Repligen Corporation (RGEN).
The top 10 holdings account for about 25.78% 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 17% so far this year and is up roughly 8.04% in the last one year (as of 08/24/2023). In the past 52-week period, it has traded between $48.53 and $65.14.
The ETF has a beta of 1.18 and standard deviation of 23.40% for the trailing three-year period. With about 236 holdings, it effectively diversifies company-specific risk.
Alternatives
Janus Henderson Small/Mid Cap Growth Alpha ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, JSMD is a great option for investors seeking exposure to the Style Box - Small Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Growth ETF (IWO) and the Vanguard Small-Cap Growth ETF (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $9.68 billion in assets, Vanguard Small-Cap Growth ETF has $13.95 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.
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.
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Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD): ETF Research Reports
Fair Isaac Corporation (FICO) : Free Stock Analysis Report
Repligen Corporation (RGEN) : Free Stock Analysis Report
iShares Russell 2000 Growth ETF (IWO): ETF Research Reports
Vanguard Small-Cap Growth ETF (VBK): ETF Research Reports
ShockWave Medical, Inc. (SWAV) : Free Stock Analysis Report
