Is Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD) a Strong ETF Right Now?

A smart beta exchange traded fund, the Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD) debuted on 02/23/2016, and offers broad exposure to the Style Box - Small Cap Growth category of the market.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

The fund is managed by Janus Henderson, and has been able to amass over $478.71 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Growth. 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.

Cost & Other Expenses

Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.

Annual operating expenses for JSMD are 0.30%, which makes it on par with most peer products in the space.

JSMD's 12-month trailing dividend yield is 0.78%.

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.

This ETF has heaviest allocation in the Industrials sector - about 27.10% of the portfolio. Healthcare and Information Technology round out the top three.

Taking into account individual holdings, Southern Copper Corporation (SCCO) accounts for about 3.16% of the fund's total assets, followed by Neurocrine Biosciences Inc. (NBIX) and Hims & Hers Health Inc. Class A (HIMS).

The top 10 holdings account for about 20.79% of total assets under management.

Performance and Risk

So far this year, JSMD has lost about -2.60%, and is up about 8.81% in the last one year (as of 05/26/2025). During this past 52-week period, the fund has traded between $62.52 and $82.80.

The ETF has a beta of 1.10 and standard deviation of 22.81% for the trailing three-year period. With about 259 holdings, it effectively diversifies company-specific risk.

Alternatives

Janus Henderson Small/Mid Cap Growth Alpha ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.

IShares Russell 2000 Growth ETF (IWO) tracks Russell 2000 Growth Index and the Vanguard Small-Cap Growth ETF (VBK) tracks CRSP U.S. Small Cap Growth Index. IShares Russell 2000 Growth ETF has $11.11 billion in assets, Vanguard Small-Cap Growth ETF has $17.92 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.

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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This article originally published on Zacks Investment Research (zacks.com).

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