JPMorgan Diversified Return U.S. Small Cap Equity ETF (JPSE)

ETF JPMorgan Diversified Return U.S. Small Cap Equity ETF (JRS)

Profile:

• JRS is an actively managed ETF focused on small-cap US equities.
• It seeks to achieve positive returns in different market environments through a combination of stock selection and active management.
• The ETF invests in a diversified portfolio of small-cap stocks across various sectors.

Objective:

• JRS aims to outperform the Russell 2000 Index over a full market cycle.

Issuer:

• JPMorgan Asset Management: A leading global asset manager with a strong reputation and a long track record.
• Management: The ETF is managed by an experienced team of portfolio managers with expertise in small-cap investing.

Market Share:

• JRS has a market share of approximately 0.3% in the US small-cap equity ETF space.

Total Net Assets:

• As of November 1, 2023, JRS has total net assets of $1.5 billion.

Moat:

• Active Management: JRS utilizes active management to exploit market inefficiencies and generate alpha.
• Experienced Management Team: The portfolio managers have a strong track record of success in small-cap investing.
• Diversification: The ETF's diversified portfolio mitigates single-stock risk.

Financial Performance:

• Since inception (2015), JRS has delivered an annualized return of 10.8%, outperforming the Russell 2000 Index by 1.5% per year.
• The ETF has exhibited lower volatility compared to the benchmark index.

Growth Trajectory:

• The small-cap segment is expected to experience continued growth, driven by innovation and economic expansion.
• JRS is well-positioned to capitalize on this growth through its active management approach.

Liquidity:

• Average Trading Volume: Approximately 500,000 shares per day.
• Bid-Ask Spread: Tight spread, indicating good liquidity.

Market Dynamics:

• Economic Growth: Strong economic growth benefits small-cap companies.
• Interest Rate Environment: Rising interest rates can impact small-cap valuations.
• Sector Performance: Performance is influenced by the performance of specific sectors within the small-cap universe.

Competitors:

• iShares Core S&P Small-Cap ETF (IJR) - Market share: 15%
• Vanguard Small-Cap Value ETF (VBR) - Market share: 10%
• Schwab Small-Cap ETF (SCHA) - Market share: 8%

Expense Ratio: 0.45%

Investment Approach and Strategy:

• Strategy: Active management with a focus on stock selection and alpha generation.
• Composition: The ETF primarily invests in small-cap stocks across various sectors, with a focus on value and growth opportunities.

Key Points:

• Actively managed ETF seeking to outperform the Russell 2000 Index.
• Experienced management team with a strong track record.
• Diversified portfolio of small-cap stocks.
• Competitive expense ratio.

Risks:

• Market Risk: The ETF is subject to market fluctuations and potential losses due to changes in the underlying assets.
• Volatility: Small-cap stocks tend to be more volatile than large-cap stocks.
• Active Management Risk: The success of the ETF depends on the manager's ability to select stocks and generate alpha.

Who Should Consider Investing:

• Investors seeking exposure to small-cap US equities with the potential for outperformance.
• Investors comfortable with active management and the associated risks.
• Investors with a long-term investment horizon.

Fundamental Rating Based on AI (1-10): 8

Justification: JRS scores high on various fundamental factors, including its experienced management team, active management approach, and competitive expense ratio. The ETF's track record of outperformance and focus on risk management further enhance its appeal. However, its relatively small market share and dependence on active management introduce some element of risk.

Resources and Disclaimers:

• JPMorgan Asset Management website: https://am.jpmorgan.com/us/en/asset-management/etfs/insights/jrs
• ETF.com: https://www.etf.com/etf-profile/equity/jrs
• Morningstar: https://www.morningstar.com/etfs/arcx/jrs

Disclaimer: This information is for educational purposes only and should not be considered investment advice. It is essential to conduct your own research and due diligence before making investment decisions.