Should Janus Henderson Small Cap Growth Alpha ETF (JSML) Be on Your Investing Radar?

If you're interested in broad exposure to the Small Cap Growth segment of the US equity market, look no further than the Janus Henderson Small Cap Growth Alpha ETF (JSML), a passively managed exchange traded fund launched on February 23, 2016.

The fund is sponsored by Janus Henderson. It has amassed assets over $291.52 million, making it one of the average sized ETFs attempting to match the Small Cap Growth segment of the US equity market.

Why Small Cap Growth

Sitting at a market capitalization below $2 billion, small cap companies tend to be high-potential stocks compared to its large and mid cap counterparts, but come with higher risk.

Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.

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 0.3%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.91%.

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 to the Industrials sector -- about 25.1% of the portfolio. Healthcare and Information Technology round out the top three.

Looking at individual holdings, Bloom Energy Corporation Class A (BE) accounts for about 2.36% of total assets, followed by Atmus Filtration Technologies Inc. (ATMU) and Cactus Inc. Class A (WHD).

The top 10 holdings account for about 19.32% of total assets under management.

Performance and Risk

JSML seeks to match the performance of the Janus Small Cap Growth Alpha Index before fees and expenses. 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.

The ETF return is roughly 3.2% so far this year and is up roughly 12.71% in the last one year (as of 02/20/2026). In the past 52-week period, it has traded between $54.00 and $78.93.

The ETF has a beta of 1.22 and standard deviation of 21.32% for the trailing three-year period. With about 121 holdings, it effectively diversifies company-specific risk.

Alternatives

Janus Henderson Small Cap Growth Alpha ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, JSML is a good option for those seeking exposure to the Style Box - Small Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.

The iShares Russell 2000 Growth ETF (IWO) and the Vanguard Small-Cap Growth ETF (VBK) track a similar index. While iShares Russell 2000 Growth ETF has $13.33 billion in assets, Vanguard Small-Cap Growth ETF has $21.24 billion. IWO has an expense ratio of 0.24% and VBK charges 0.05%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.