Is JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME) a Strong ETF Right Now?

Designed to provide broad exposure to the Style Box - Mid Cap Blend category of the market, the JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME) is a smart beta exchange traded fund launched on 05/11/2016.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

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However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

The fund is managed by J.P. Morgan. JPME has been able to amass assets over $350.98 million, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. JPME, before fees and expenses, seeks to match the performance of the Russell Midcap Diversified Factor Index.

The JP Morgan Diversified Factor US Mid Cap Equity Index utilizes a rules-based approach that combines risk-based portfolio construction with multi-factor security selection, including value, quality and momentum factors.

Cost & Other Expenses

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.24%, making it on par with most peer products in the space.

It's 12-month trailing dividend yield comes in at 1.95%.

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.

For JPME, it has heaviest allocation in the Healthcare sector --about 11.8% of the portfolio --while Industrials and Real Estate round out the top three.

Taking into account individual holdings, Nrg Energy Inc Common (NRG) accounts for about 0.67% of the fund's total assets, followed by Vistra Corp Common Stock (VST) and United States Steel Corp (X).

The top 10 holdings account for about 5.36% of total assets under management.

Performance and Risk

Year-to-date, the JPMorgan Diversified Return U.S. Mid Cap Equity ETF has gained about 1.8% so far, and is up about 10.9% over the last 12 months (as of 06/30/2025). JPME has traded between $89.28 and $110.92 in this past 52-week period.

JPME has a beta of 0.94 and standard deviation of 16.33% for the trailing three-year period. With about 352 holdings, it effectively diversifies company-specific risk .

Alternatives

JPMorgan Diversified Return U.S. Mid Cap Equity ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.

Vanguard Mid-Cap ETF (VO) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $82.23 billion in assets, iShares Core S&P Mid-Cap ETF has $94.78 billion. VO has an expense ratio of 0.04% and IJH changes 0.05%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Blend

Bottom Line

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. Mid Cap Equity ETF (JPME): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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