Designed to provide broad exposure to the Small Cap Growth segment of the US equity market, the Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD) is a passively managed exchange traded fund launched on 02/23/2016.
The fund is sponsored by Janus Henderson. It has amassed assets over $537.74 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
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Costs
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 0.30%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.82%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 20.60% of the portfolio. Information Technology and Industrials round out the top three.
Looking at individual holdings, Equitable Holdings Inc. (EQH) accounts for about 2.37% of total assets, followed by Nrg Energy Inc. (NRG) and Manhattan Associates Inc. (MANH).
The top 10 holdings account for about 20.53% 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 return is roughly 4.24% so far this year and was up about 14.95% in the last one year (as of 07/14/2025). In the past 52-week period, it has traded between $62.52 and $82.80.
The ETF has a beta of 1.08 and standard deviation of 21.58% for the trailing three-year period. With about 110 holdings, it effectively diversifies company-specific risk.
Alternatives
Janus Henderson Small/Mid Cap Growth Alpha 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, JSMD is a sufficient option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
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 $11.76 billion in assets, Vanguard Small-Cap Growth ETF has $19.20 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 NRG Energy, Inc. (NRG): Free Stock Analysis Report Manhattan Associates, Inc. (MANH): Free Stock Analysis Report iShares Russell 2000 Growth ETF (IWO): ETF Research Reports Vanguard Small-Cap Growth ETF (VBK): ETF Research Reports Equitable Holdings, Inc. (EQH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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