Neuberger Berman has introduced a new actively managed ETF focused on US small and mid-cap equities.

Neuberger Berman’s latest ETF invests in US small and mid-cap companies with robust quality characteristics.

The Neuberger Berman Small-Mid Cap ETF (NBSM US) has been listed on NYSE Arca with an expense ratio of 0.74%.

According to Neuberger Berman, the relative lack of analyst coverage in the SMID universe can result in companies that are underappreciated and mispriced versus their potential, creating opportunities for active managers to add value.

Moreover, considering the elevated volatility and broad range of returns observed within small and mid-caps, emphasizing high-quality companies while adopting a prudent portfolio risk management strategy may serve to mitigate downside risks efficiently.

Neuberger Berman, backed by a seasoned portfolio management team, utilizes deep fundamental research to identify resilient companies from within the Russell 2000 Index. The approach focuses on firms exhibiting consistent free cash flow, strong profitability, prudent balance sheets, and unique business models with sustainable competitive advantages.

Emphasizing financial stability over projected growth, the strategy also considers a firm’s performance across ESG metrics when selecting portfolio holdings.

To manage risk, the portfolio managers maintain broad diversification across industries and issuers, and the fund may reach into foreign equity markets for up to a maximum of 10% of portfolio assets in a search for higher returns.