Launched on February 23, 2016, the Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD) is a passively managed exchange traded fund designed to provide a broad exposure to the Small Cap Growth segment of the US equity market.
The fund is sponsored by Janus Henderson. It has amassed assets over $699.63 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
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
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. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. 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 0.3%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.75%.
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 Information Technology sector -- about 21% of the portfolio. Financials and Industrials round out the top three.
Looking at individual holdings, Sterling Infrastructure Inc. (STRL) accounts for about 2.72% of total assets, followed by Sofi Technologies Inc (SOFI) and Primoris Services Corporation (PRIM).
The top 10 holdings account for about 22.49% 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 has gained about 13.06% so far this year and was up about 18.9% in the last one year (as of 09/18/2025). In the past 52-week period, it has traded between $62.52 and $85.59.
The ETF has a beta of 1.10 and standard deviation of 20.97% for the trailing three-year period. With about 108 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 $12.77 billion in assets, Vanguard Small-Cap Growth ETF has $20.56 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 ReportsThis article originally published on Zacks Investment Research (zacks.com).
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