Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the JPMorgan Diversified Return U.S. Equity ETF (JPUS), a passively managed exchange traded fund launched on 09/29/2015.
The fund is sponsored by J.P. Morgan. It has amassed assets over $582.57 million, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.18%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 3.04%.
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 Consumer Discretionary sector–about 14.30% of the portfolio. Healthcare and Information Technology round out the top three.
Looking at individual holdings, Wec Energy Group Inc (WEC) accounts for about 0.56% of total assets, followed by Microsoft Corp Common (MSFT) and T-Mobile Us Inc Common (TMUS).
The top 10 holdings account for about 5.14% of total assets under management.
Performance and Risk
JPUS seeks to match the performance of the Russell 1000 Diversified Factor Index before fees and expenses. The Russell 1000 Diversified Factor Index comprises of U.S. equity securities selected to represent a diversified set of factor characteristics, originally developed by the adviser.
The ETF has lost about -28.59% so far this year and is down about -19.26% in the last one year (as of 03/26/2020). In the past 52-week period, it has traded between $49.95 and $81.47.
The ETF has a beta of 0.96 and standard deviation of 19.18% for the trailing three-year period, making it a medium risk choice in the space. With about 404 holdings, it effectively diversifies company-specific risk.
JPMorgan Diversified Return U.S. 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, JPUS is a sufficient option for those seeking exposure to the Style Box – Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $155.16 billion in assets, SPDR S&P 500 ETF has $229.13 billion. IVV has an expense ratio of 0.04% and SPY charges 0.09%.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.