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

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.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

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.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Because the fund has amassed over $269.11 million, this makes it one of the average sized ETFs in the Style Box - Small Cap Growth. JSML is managed by Janus Henderson. Before fees and expenses, this particular fund 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

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.

Annual operating expenses for this ETF are 0.30%, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.21%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. 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 28.10% of the portfolio. Healthcare and Information Technology round out the top three.

When you look at individual holdings, Corcept Therapeutics Incorporated. (CORT) accounts for about 3.67% of the fund's total assets, followed by Corvel Corporation (CRVL) and Catalyst Pharmaceuticals Inc. (CPRX).

Performance and Risk

So far this year, JSML has lost about -1.04%, and was up about 11.34% in the last one year (as of 02/27/2025). During this past 52-week period, the fund has traded between $56.12 and $73.60.

The ETF has a beta of 1.28 and standard deviation of 24.57% for the trailing three-year period. With about 204 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 $11.89 billion in assets, Vanguard Small-Cap Growth ETF has $19.27 billion. IWO has an expense ratio of 0.24% and VBK charges 0.07%.

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

Corcept Therapeutics Incorporated (CORT) : Free Stock Analysis Report

Catalyst Pharmaceuticals, Inc. (CPRX) : Free Stock Analysis Report

iShares Russell 2000 Growth ETF (IWO): ETF Research Reports

Vanguard Small-Cap Growth ETF (VBK): ETF Research Reports

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

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