August 30, 2021 4 min read
This story originally appeared on Zacks
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 $705.67 million, making it one of the average sized 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.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Investors should also pay attention to an ETF’s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.51%.
Sector Exposure and Top Holdings
ETFs offer a 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 to the Healthcare sector–about 14% of the portfolio. Information Technology and Consumer Staples round out the top three.
Looking at individual holdings, Apple Inc Common Stock (AAPL) accounts for about 0.63% of total assets, followed by Microsoft Corp Common (MSFT) and Nvidia Corp Common Stock (NVDA).
The top 10 holdings account for about 5.08% 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 added about 22.47% so far this year and is up about 34.91% in the last one year (as of 08/30/2021). In the past 52-week period, it has traded between $71.50 and $100.70.
The ETF has a beta of 1 and standard deviation of 22.87% for the trailing three-year period, making it a medium risk choice in the space. With about 364 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 $303.91 billion in assets, SPDR S&P 500 ETF has $395.45 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $2.4 trillion by 2028 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Recommendations from previous editions of this report have produced gains of +205%, +258% and +477%. The stocks in this report could perform even better.
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. Equity ETF (JPUS): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
To read this article on Zacks.com click here.