Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the JPMorgan Diversified Return U.S. Equity ETF (JPUS) is a passively managed exchange traded fund launched on 09/29/2015.
The fund is sponsored by J.P. Morgan. It has amassed assets over $682.64 million, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually 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 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.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 1.60%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund’s holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector–about 13.70% of the portfolio. Consumer Staples and Information Technology 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 gained about 19.13% so far this year and was up about 32.05% in the last one year (as of 10/07/2021). In the past 52-week period, it has traded between $73.30 and $101.67.
The ETF has a beta of 1 and standard deviation of 22.98% 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 good 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 $290.61 billion in assets, SPDR S&P 500 ETF has $388.40 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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