The JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME) was launched on 05/11/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Mid Cap Blend category of the market.
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
The fund is managed by J.P. Morgan. JPME has been able to amass assets over $344.23 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. Before fees and expenses, JPME seeks to match the performance of the Russell Midcap Diversified Factor Index.
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 is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.24% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.96%.
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, 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 11.50% of the portfolio. Its Consumer Staples and Industrials round out the top three.
Looking at individual holdings, Antero Resources Corp (AR) accounts for about 0.48% of total assets, followed by Applovin Corp Common (APP) and Nrg Energy Inc Common (NRG).
The top 10 holdings account for about 4.52% of total assets under management.
Year-to-date, the JPMorgan Diversified Return U.S. Mid Cap Equity ETF has lost about -3.65% so far, and is up about 5.05% over the last 12 months (as of 04/30/2025). JPME has traded between $89.28 and $110.92 in this past 52-week period.
The ETF has a beta of 0.96 and standard deviation of 17.32% for the trailing three-year period. With about 354 holdings, it effectively diversifies company-specific risk.
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) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $72.75 billion in assets, iShares Core S&P Mid-Cap ETF has $87.03 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.
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
NRG Energy, Inc. (NRG) : Free Stock Analysis Report
AppLovin Corporation (APP) : Free Stock Analysis Report
Antero Resources Corporation (AR) : Free Stock Analysis Report
iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports
Vanguard Mid-Cap ETF (VO): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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