This fund looks within the small and mid cap range for companies that attract little market attention or whose value does not appear to be fully reflected in their share prices. Rather than mechanically tracking the constituents of an index, it is an actively managed exchange-traded fund that combines research findings with valuation judgment.

It suits long-term investors who want to add small and mid cap value exposure to a portfolio and can accept holdings that differ from an index because of the manager's judgment.

It is an ETF with an active management approach, run by Hotchkis & Wiley.

The manager uses its own valuation models and the judgment of its research team to select small and mid cap stocks that may be undervalued. Because the portfolio is built with financial structure and corporate governance in mind, holdings and performance can vary with the manager's judgment, unlike index-tracking products.

• Active selection that combines valuation models with research judgment
• A diversified approach focused on small and mid cap value stocks

Assets under management (AUM) stand at $2.9M, and the expense ratio is 0.55% per year.

Actively managed products centered on small and mid cap stocks may differ from index-based large cap value ETFs in fees and trading conditions, so it is worth checking bid-ask spreads and long-term costs together.

Small and mid cap value stocks can move differently from large caps as interest rates, economic expectations, and corporate earnings outlooks change. This fund's performance reflects both its valuation judgments and changes in the earnings of individual holdings, so relative results can diverge even when the overall market is rising.

Fund flows into small and mid cap value ETFs can vary with market participants' risk appetite, expectations for cyclical sectors, and the interest rate environment. For actively managed products, understanding the investment philosophy and changes in holdings is important, and before investing you should also check trading conditions and the possible gap between market price and net asset value.

Active value stock selection and small and mid cap exposure are distinguishing features, but investors should be mindful of volatility stemming from individual stocks, the manager's judgment, and trading conditions.

In the comparison table, the VTV ETF offers broad exposure centered on large cap value stocks, while the IWD ETF and IVE ETF are closer to index-based approaches to large cap value. The VBR ETF leans more toward small cap value, and the SPYV ETF is compared as a large cap value option. Because the HWSM ETF actively selects small and mid cap value stocks, investors should look at differences from these index-tracking products in holdings decisions, fee burden, and management results. Top holdings such as FFIV, PPG, and APA are items to monitor for the impact of individual company movements.

Before investing, first confirm that active management works differently from index-based products. You need to check whether the weighting of small and mid cap stocks, the value orientation, trading conditions, and the distribution structure fit your investment horizon and risk tolerance.

Holdings in small and mid cap stocks can be sensitive to economic shifts and deteriorating market liquidity. In addition, the results of active management depend on research judgment and stock selection, and the ETF's market price may differ from its net asset value. Diversification also does not prevent losses in a falling market.

The Hotchkis & Wiley SMID Cap Diversified Value Fund can be a candidate for investors who want to actively invest in small and mid cap value stocks. However, because its investment scope and management style differ from index-based large cap value ETFs, it is advisable to compare costs, trading conditions, value stock volatility, and distribution structure before making a decision.