On Thursday, Neuberger Berman added to its ETF lineup with the launch of the Neuberger Berman Small-Mid Cap ETF (NYSE Arca: NBSM).
NBSM has a net expense ratio of 0.87%, with fee waivers of 13 basis points. That brings the cost down to 0.74% through the end of August 2027. The fund is actively managed and prioritizes capital growth.
According to the fund prospectus, the ETF aims to allocate the majority of its assets in small- or midcap companies that have market capitalizations comparable to those of the companies included in the Russell 2000 Index or the Russell Midcap Index.
Based on economic and market trends, NBSM may overweight sectors that the portfolio managers expect to overperform. The ETF has a primarily domestic focus. But, it may invest up to 10% of its assets in foreign companies.
Neuberger Berman ETF Uses Bottom-Up Analysis
To evaluate assets, the fund managers use a bottom-up strategy that targets undervalued securities. Instead of focusing on growth projections, the managers are more concerned with the established business activities of companies that demonstrate financial strength in addition to low valuations.
NBSM’s managers can take into consideration environmental, social, and governance (ESG) criteria. But their inclusion in the evaluation process does not indicate the fund has an ESG focus, the prospectus says.
The company’s website says the ETF’s investment approach aims to limit its volatility often associated with the SMID space.
NBSM is Neuberger Berman’s eighth ETF to be listed in the U.S. The issuer entered the ETF arena in April 2022 and has maintained an entirely actively managed lineup. Its largest ETF, the Neuberger Berman Option Strategy ETF (NBOS), currently holds roughly $467 million in AUM. It converted into an ETF wrapper from a mutual fund in January.
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