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

This post was originally published on this site

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.

Costs

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.

Alternatives

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%.

Bottom-Line

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.

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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
 
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