If you're interested in broad exposure to the Small Cap Value segment of the US equity market, look no further than the JPMorgan BetaBuilders U.S. Small Cap Equity ETF (BBSC), a passively managed exchange traded fund launched on November 16, 2020.
The fund is sponsored by J.P. Morgan. It has amassed assets over $689.76 million, making it one of the average sized ETFs attempting to match the Small Cap Value segment of the US equity market.
Why Small Cap Value
With more potential comes more risk, and small cap companies, with market capitalization below $2 billion, epitomizes this way of thinking.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.12%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector -- about 17.8% of the portfolio. Healthcare and Information Technology round out the top three.
Looking at individual holdings, Jpmorgan U.s. Government (MGMXX) accounts for about 1.31% of total assets, followed by Moog Inc-Class A (MOG.A) and American Healthcare Reit (AHR).
The top 10 holdings account for about 5.35% of total assets under management.
Performance and Risk
BBSC seeks to match the performance of the MORNINGSTAR US SML CP TRG MRK EXP EXT ID before fees and expenses. The Morningstar US Small Cap Target Market Exposure Extended Index is a free-float adjusted, market-cap weighted index that targets small cap securities traded in the U.S.
The ETF has added about 6.29% so far this year and it's up approximately 45.14% in the last one year (as of 04/13/2026). In the past 52-week period, it has traded between $55.11 and $80.53.
The ETF has a beta of 1.14 and standard deviation of 21.67% for the trailing three-year period. With about 742 holdings, it effectively diversifies company-specific risk.
Alternatives
JPMorgan BetaBuilders U.S. Small Cap Equity ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, BBSC is an excellent option for investors seeking exposure to the Style Box - Small Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 2000 Value ETF (IWN) and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) track a similar index. While iShares Russell 2000 Value ETF has $12.81 billion in assets, Vanguard Small-Cap Value Index Fund ETF Shares has $33.68 billion. IWN has an expense ratio of 0.24% and VBR charges 0.05%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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 BetaBuilders U.S. Small Cap Equity ETF (BBSC): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).