The Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD) made its debut on 02/23/2016, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small Cap Growth category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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
The fund is managed by Janus Henderson, and has been able to amass over $1.07 billion, which makes it one of the average sized ETFs in the Style Box - Small Cap Growth. JSMD, before fees and expenses, seeks to match the performance of the Janus Small/Mid Cap Growth Alpha Index.
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.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for JSMD are 0.30%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.43%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
JSMD's heaviest allocation is in the Healthcare sector, which is about 25.2% of the portfolio. Its Information Technology and Industrials round out the top three.
Taking into account individual holdings, Sterling Infrastructure Inc. (STRL) accounts for about 1.98% of the fund's total assets, followed by Commvault Systems Inc. (CVLT) and Ryman Hospitality Properties Inc. (RHP).
Its top 10 holdings account for approximately 16.53% of JSMD's total assets under management.
Performance and Risk
So far this year, JSMD return is roughly 16.23%, and it's up approximately 15.83% in the last one year (as of 08/26/2026). During this past 52-week period, the fund has traded between $75.60 and $101.24.
The ETF has a beta of 1.15 and standard deviation of 21.07% for the trailing three-year period. With about 126 holdings, it effectively diversifies company-specific risk .
Alternatives
Janus Henderson Small/Mid Cap Growth Alpha ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
iShares Russell 2000 Growth ETF (IWO) tracks Russell 2000 Growth Index and the Vanguard Morningstar Small-Cap Growth ETF (VBK) tracks CRSP U.S. Small Cap Growth Index. iShares Russell 2000 Growth ETF has $15.06 billion in assets, Vanguard Morningstar Small-Cap Growth ETF has $24.24 billion. IWO has an expense ratio of 0.24% and VBK changes 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 - Small Cap Growth
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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Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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