JSMD: Riding the Wave of Resilient Growth with a Boost in Dividends

The markets are in a constant state of flux, but one thing remains clear: investors crave stability in dividends and the potential for outperformance. Enter the Janus Henderson Small/Mid Cap Growth Alpha ETF (JSMD), which recently announced a 3% dividend rate hike, pushing its yield to $0.64 per share—a bold move that underscores its underlying portfolio's strength. This isn't just about the payout; it's a signal of confidence in the ETF's Smart Growth® process, which targets small and mid-cap stocks with rock-solid fundamentals. Let's dive into why JSMD could be a standout play for 2025 and beyond.

The Smart Growth® Process: A Recipe for Resilience

JSMD's Smart Growth® process is its secret sauce. This strategy isn't about chasing fads or overhyped sectors. Instead, it focuses on small- and mid-cap companies with strong balance sheets, sustainable earnings growth, and competitive advantages. These are the “hidden champions” that often fly under the radar but deliver consistent performance. By emphasizing risk-adjusted returns, JSMD aims to navigate volatility while compounding gains.

Take a closer look at the ETF's portfolio. It's packed with companies that have pricing power, low debt, and recurring revenue streams—qualities that shield them from economic downturns. For example, sectors like healthcare, technology, and industrials dominate the holdings, all of which have shown resilience in past recessions. This isn't just a gamble on growth; it's a calculated bet on businesses that can weather storms while still expanding.

Dividend Hikes as a Sign of Strength

The recent June 2025 dividend increase to $0.64 per share isn't an isolated event. It follows a 3% hike in December 2024, which itself came after a period of dips and recoveries. While the trailing 12-month yield of 0.74% might seem modest compared to the NASDAQ's 4.14%, this isn't about chasing yield—it's about capital appreciation. JSMD's dividend growth rate over the past year soared to 94.9%, reflecting the power of its portfolio's underlying earnings.

Critics might point to the 3-year annualized dividend growth rate of 0.00%, which suggests volatility. But here's the key: JSMD isn't a “set it and forget it” income play. It's a growth vehicle that uses dividends to reward investors while reinvesting in high-potential companies. The recent hikes prove that when its holdings thrive, the ETF doesn't hesitate to pass along the gains.

Why JSMD Shines in Volatile Markets

Small- and mid-cap stocks have a reputation for volatility, but JSMD's Smart Growth® process mitigates this risk. By focusing on companies with strong cash flows and defensive characteristics, the ETF avoids the whipsaw of over-leveraged or speculative plays. During the 2022 market crash, JSMD underperformed the S&P 500 but outrebounded it in the recovery phase, showcasing its resilience in both directions.

Moreover, the dividend consistency over the past decade—despite market swings—speaks volumes. Even when the ETF trimmed payouts temporarily (like the March 2025 dip), it quickly rebounded, proving its ability to adapt. This balance of growth and stability is rare in today's markets, where many funds prioritize one over the other.

The Bottom Line: A Growth Play with a Safety Net

JSMD isn't for income junkies—it's for investors who want growth with a margin of safety. The recent dividend hikes are just icing on the cake; the real value lies in its portfolio construction and the Smart Growth® process that identifies companies primed to outperform.

Action Plan:
- Buy on dips: Volatility creates entry points. Use tools like dollar-cost averaging to build a position.
- Hold for the long term: This isn't a trading vehicle; it's a core holding for portfolios seeking growth.
- Watch the ex-dividend dates: The next one is expected in late September/October 2025, with a projected payout of $0.0415–$0.073—a sign of continued confidence.

The takeaway? JSMD is no flash in the pan. With its focus on resilient small/mid-cap growth stocks and a dividend record that rewards patience, this ETF could be a cornerstone of your portfolio for years to come.

Stay Foolish—invest with discipline, and let JSMD work for you.