Should JPMorgan Diversified Return U.S. Small Cap Equity ETF (JPSE) Be on Your Investing Radar?

The JPMorgan Diversified Return U.S. Small Cap Equity ETF (JPSE) was launched on 11/15/2016, and is a passively managed exchange traded fund designed to offer broad exposure to the Small Cap Blend segment of the US equity market.The fund is sponsored by J.P. Morgan. It has amassed assets over $433.26 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.Why Small Cap BlendThere'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.Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.CostsWhen considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.Annual operating expenses for this ETF are 0.29%, putting it on par with most peer products in the space.It has a 12-month trailing dividend yield of 1.96%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation to the Industrials sector--about 12.30% of the portfolio. Financials and Real Estate round out the top three.Looking at individual holdings, Echostar Corp Common (SATS) accounts for about 0.44% of total assets, followed by Aris Water Solutions Inc (ARIS) and Solaris Energy (SEI).The top 10 holdings account for about 3.87% of total assets under management.Performance and RiskJPSE seeks to match the performance of the Russell 2000 Diversified Factor Index before fees and expenses. The JP Morgan Diversified Factor US Small 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.The ETF has lost about -13.72% so far this year and is down about -5.70% in the last one year (as of 04/14/2025). In the past 52-week period, it has traded between $38.20 and $51.70.The ETF has a beta of 1.05 and standard deviation of 21.21% for the trailing three-year period. With about 556 holdings, it effectively diversifies company-specific risk.AlternativesJPMorgan Diversified Return U.S. Small Cap 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, JPSE is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.The iShares Russell 2000 ETF (IWM) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While iShares Russell 2000 ETF has $58.32 billion in assets, iShares Core S&P Small-Cap ETF has $70.98 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.Bottom-LineWhile an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report JPMorgan Diversified Return U.S. Small Cap Equity ETF (JPSE): ETF Research Reports EchoStar Corporation (SATS): Free Stock Analysis Report iShares Russell 2000 ETF (IWM): ETF Research Reports Aris Water Solutions, Inc. (ARIS): Free Stock Analysis Report iShares Core S&P Small-Cap ETF (IJR): ETF Research Reports Solaris Energy Infrastructure, Inc. (SEI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks