Designed to provide broad exposure to the Style Box - Mid Cap Blend category of the market, the JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME) is a smart beta exchange traded fund launched on 05/11/2016.
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.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
Managed by J.P. Morgan, JPME has amassed assets over $471.63 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. This particular fund, before fees and expenses, 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 & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.24% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.75%.
Sector Exposure and Top Holdings
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.
Representing 13.1% of the portfolio, the fund has heaviest allocation to the Healthcare sector; Industrials and Consumer Staples round out the top three.
Taking into account individual holdings, Halozyme Therapeutics (HALO) accounts for about 0.5% of the fund's total assets, followed by Hewlett Packard (HPE) and Hf Sinclair Corp Common (DINO).
Its top 10 holdings account for approximately 4.63% of JPME's total assets under management.
Performance and Risk
The ETF has gained about 15.78% so far this year and is up about 15.68% in the last one year (as of 09/14/2026). In the past 52-week period, it has traded between $104.47 and $129.19
The ETF has a beta of 0.88 and standard deviation of 13.88% for the trailing three-year period. With about 353 holdings, it effectively diversifies company-specific risk .
Alternatives
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 Morningstar 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 Morningstar Mid-Cap ETF has $106.04 billion in assets, iShares Core S&P Mid-Cap ETF has $123.73 billion. VO has an expense ratio of 0.03% and IJH 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 - Mid Cap Blend
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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JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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