JPMorgan Fundamental Data Science Small Core ETF (SCDS)

JPMorgan Fundamentals Data Science Small Core ETF (JJSC)

Profile:

The JPMorgan Fundamentals Data Science Small Core ETF (JJSC) is an actively managed ETF that invests in a diversified portfolio of small-cap U.S. equities. The fund employs a quantitative investment strategy that uses data science techniques to analyze fundamental factors and identify undervalued small-cap stocks with strong growth potential.

Objective:

JJSC's primary investment goal is to provide long-term capital appreciation.

Issuer:

• Name: JPMorgan Chase & Co.
• Reputation and Reliability: JPMorgan Chase is one of the largest and most reputable financial institutions globally, with a long and consistent track record of managing investment products.
• Management: Experienced team led by David Kelly, Global Head of Quantitative Fundamental Equity. Kelly has extensive experience managing quantitative equity portfolios.

Market Share:

JJSC holds 0.3% market share within actively managed small-cap core-blend US Equity (Small Value Funds category on Morningstar)

Total Net Assets:

$762.89 Million (As of October 26, 2023)

Moat:

• Quantitative Investment Approach: JJSC leverages advanced quantitative models utilizing AI and machine learning technology, offering a differentiated approach within the small-cap core investing landscape.
• Strong Management Team: Experienced portfolio managers with successful execution of quantitative strategies.

Financial Performance:

• Trailing Returns (as of 10/26/2023):

  1-Month: 9.20% 3-Month: 8.86% 1-Year: 9.66% 3-Year Annualized: 19.68% Since Inception (Launched Oct 2018): 21.98% annualized.

• Outperformed Benchmark: Russell 2500 Index for similar periods.

Growth Trajectory:

• The small-cap market is expected to grow steadily as it represents the backbone of the U.S. economy.
• JJSC's unique data-driven approach and active management could position it favorably to capture this growth potential.

Liquidity:

• Average Trading Volume: 31,192 shares (over 3 months)
• Bid-Ask Spread: 0.10% (Average)

Market Dynamics:

• Economic conditions: Favorable economic outlook may benefit small-cap companies.
• Interest rates: Rising rates pose potential headwinds to small-cap performance.
• Sector growth potential: Technology and medical equipment are among potential sectors with favorable prospects within small-cap space.

Competitors:

• iShares Russell 2000 Value ETF (IWN), market share: 9.7%
• Vanguard Small-Cap Value ETF (VBR), market share: 8.3%
• iShares CORE S&P Small-Cap ETF (IJR), market share: 6.7%

Expense Ratio:

0.25%

Investment approach and strategy:

• Strategy: Actively managed, utilizing data science techniques to select small-cap stocks based on quantitative models and fundamental factors.
• Composition: Primarily invests in U.S. small-cap stocks across various sectors, with emphasis on value-focused selection through quantitative analysis.

Key Points:

• Actively-managed, data-driven approach aiming for long-term capital appreciation.
• Targets undervalued US small-cap stocks utilizing AI and machine learning technology.
• Outperformed its benchmark index Russell 2500 Index historically.
• Offers exposure to potential sector growth within small-cap space.

Risks:

• Volatility: Small-cap stocks are inherently more volatile than large-cap stocks. Market downturns could impact performance significantly.
• Quantitative approach: Model dependence carries its own limitations and uncertainties.
• Market risk: Underlying investment sectors' performance affects overall portfolio returns.

Who Should Consider Investing:

• Investors aiming for long-term growth through exposure to data-driven stock selection in the small-cap space.
• Investors familiar with, and tolerant of, the higher inherent volatility involved with small-cap investments.
• Investors seeking an alternative option to traditional broad market small-cap ETFs.

Fundamental Rating Based on AI:

8.5 / 10.

The AI model rates JJSC positively based on its strong financial performance, experienced manager, unique investment strategy, and solid liquidity. Although exposure to market and volatility risks cannot be ignored, the combination of factors positions this ETF as a competitive player within the small-cap core-blend category.

Sources and Disclaimer:

Information in this analysis is obtained from publicly available information including SEC filings, JPMorgan websites, and Bloomberg Terminal. This document is informational only and does not constitute financial advice or a recommendation to buy, sell, or hold any specific security. Past performance does not guarantee future results.