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?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

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

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.

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.

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

JPME is managed by J.P. Morgan, and this fund has amassed over $399.92 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Blend. Before fees and expenses, this particular fund 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

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 cousins, other things remaining the same.

Operating expenses on an annual basis are 0.24% for JPME, making it on par with most peer products in the space.

JPME's 12-month trailing dividend yield is 1.91%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Industrials sector - about 12.4% of the portfolio. Consumer Staples and Healthcare round out the top three.

When you look at individual holdings, Western Digital Corp (WDC) accounts for about 0.61% of the fund's total assets, followed by Lumentum Holdings Inc (LITE) and Teradyne Inc Common (TER).

The top 10 holdings account for about 4.98% of total assets under management.

Performance and Risk

The ETF has gained about 6.12% and was up about 16.59% so far this year and in the past one year (as of 03/09/2026), respectively. JPME has traded between $89.28 and $119.86 during this last 52-week period.

The ETF has a beta of 0.93 and standard deviation of 14.34% for the trailing three-year period. With about 351 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 Index Fund ETF Shares (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 Index Fund ETF Shares has $94.29 billion in assets, iShares Core S&P Mid-Cap ETF has $106.66 billion. VO has an expense ratio of 0.03% 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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