Is Janus Henderson Small Cap Growth Alpha ETF (JSML) a Strong ETF Right Now?

Making its debut on 02/23/2016, smart beta exchange traded fund Janus Henderson Small Cap Growth Alpha ETF (JSML) provides investors broad exposure to the Style Box - Small Cap Growth category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

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

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.

The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.

Fund Sponsor & Index

The fund is managed by Janus Henderson. JSML has been able to amass assets over $296.56 million, making it one of the average sized ETFs in the Style Box - Small Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the Janus Small Cap Growth Alpha Index.

The Janus Henderson Small Cap Growth Alpha Index selects small-sized capitalization stocks that are poised for smart growth by evaluating each company performance in three critical areas: growth, profitability, and capital efficiency.

Cost & Other Expenses

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

Operating expenses on an annual basis are 0.30% for JSML, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.89%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

For JSML, it has heaviest allocation in the Industrials sector --about 25.7% of the portfolio --while Healthcare and Information Technology round out the top three.

Taking into account individual holdings, Bloom Energy Corporation Class A (BE) accounts for about 2.36% of the fund's total assets, followed by Atmus Filtration Technologies Inc. (ATMU) and Cactus Inc. Class A (WHD).

JSML's top 10 holdings account for about 19.32% of its total assets under management.

Performance and Risk

So far this year, JSML has added roughly 4.7%, and was up about 19.79% in the last one year (as of 02/27/2026). During this past 52-week period, the fund has traded between $54.00 and $78.93.

JSML has a beta of 1.22 and standard deviation of 21.24% for the trailing three-year period. With about 121 holdings, it effectively diversifies company-specific risk .

Alternatives

Janus Henderson Small Cap Growth Alpha ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.

iShares Russell 2000 Growth ETF (IWO) tracks Russell 2000 Growth Index and the Vanguard Small-Cap Growth ETF (VBK) tracks CRSP U.S. Small Cap Growth Index. iShares Russell 2000 Growth ETF has $13.36 billion in assets, Vanguard Small-Cap Growth ETF has $21.51 billion. IWO has an expense ratio of 0.24% and VBK 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 - Small Cap Growth

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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Janus Henderson Small Cap Growth Alpha ETF (JSML): ETF Research Reports

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

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