J.P. Morgan launched a new ETF on Wednesday on NYSE Arca that’s designed to provide exposure to the U.S. mid-cap equity market using an indexed approach. The JPMorgan BetaBuilders U.S. Mid Cap Equity ETF (BBMC) is the latest fund in J.P. Morgan Asset Management’s BetaBuilders group.
BBMC seeks investment results that closely correspond to the Morningstar US Mid Cap Target Market Exposure Extended Index. The Index is a free-float adjusted market-cap weighted index which consists of equity securities traded in the United States. Using a “passive” investment approach, BBMC attempts to replicate the Index as closely as possible.
The fund will invest at least 80% of its assets in securities included in the underlying Index. The underlying Index consists of equity securities primarily traded in the United States and targets those securities that fall between the 85th and 95th percentiles in market capitalization of the free float-adjusted investable universe.
The Underlying Index
Primarily included in the underlying Index are mid-capitalization companies, although large and small-capitalization companies can be included as well. Components of the Underlying Index are allocated across various sectors. However, the components of the Underlying Index and the sectors represented are likely to change over time.
The Fund’s equity securities include common stock, preferred stock, and real estate investment trusts (REITs). As of January 31, 2020, the market capitalizations of the companies in the Underlying Index ranged from $715.87 million to $12.65 billion and the underlying Index included 516 securities.
As noted, BBMC is the latest BetaBuilder fund for JP Morgan. Beta is a measure of the volatility of a security or a portfolio relative to a market benchmark. The term “BetaBuilders” in the Fund’s name conveys the intended outcome of providing investors with passive exposure and returns that generally correspond to a market cap-weighted benchmark. BBMC, along with other JPMorgan BetaBuilders Funds, can be used to help an investor build a portfolio of passive exposure to various markets.
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