Neuberger Berman made a significant mark in the world of Exchange-Traded Funds (ETFs) on Thursday by launching the Neuberger Berman Small-Mid Cap ETF (NYSE Arca: NBSM).

Featuring a net expense ratio of 0.87%, with fee waivers of 13 basis points reducing the cost to 0.74% until August 2027, NBSM is actively managed with a focus on capital growth.

The Strategic Investment Approach

The fund’s objective, outlined in its prospectus, is to concentrate the majority of its assets in small- or midcap companies akin to those in the Russell 2000 Index or the Russell Midcap Index.

Responsive to economic and market dynamics, NBSM might overweight sectors expected to outperform. While primarily domestic-focused, the ETF can allocate up to 10% of its assets to foreign companies.

Unveiling the Managerial Strategy

Employing a bottom-up analysis strategy, fund managers delve into undervalued securities, placing less emphasis on growth projections and more on the financial robustness and established operations of companies.

Although environmental, social, and governance (ESG) criteria may factor into the evaluation, the prospectus clarifies that ESG considerations do not define the fund’s focus.

Neuberger Berman’s website highlights the ETF’s approach as aiming to mitigate the typical volatility associated with the small-mid cap investment space.

Neuberger Berman’s ETF Expansion

NBSM marks the eighth ETF to join Neuberger Berman’s U.S. roster since the issuer’s entry into the ETF landscape in April 2022, boasting a fully active management model. The Neuberger Berman Option Strategy ETF (NBOS), the largest in its lineup with approximately $467 million in assets under management (AUM), transitioned from a mutual fund to an ETF structure in January.

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