TSME ETF: What Is It? — A Comprehensive Guide to Returns, Expense Ratio, Holdings, and Alternative ETFs
This is an active ETF that selectively invests in promising US mid- and small-cap stocks. Through the fund manager's professional analysis, it aims to generate excess returns relative to the benchmark index.
SubscribeWhat is this ETF?
It is an active ETF that seeks long-term capital growth by identifying companies with high potential in the mid- and small-cap space. Its primary investment universe consists of companies within the Russell 2500, S&P MidCap 400, and S&P SmallCap 600 index ranges.
It is well-suited for mid- and small-cap investors seeking excess returns versus the benchmark, leveraging the manager's bottom-up company analysis capabilities.
This actively managed ETF was launched by Thrivent in 2022.
How does it invest?
| Item | Details |
|---|---|
| Benchmark Index | Russell 2500 (reference) |
| Management Style | Active (non-disclosed model) |
| Rebalancing Frequency | As needed (active management) |
| Distribution Schedule | Annual |
| Total Expense Ratio | 0.65% |
The fund manager selects mid- and small-cap companies with competitive advantages and growth potential through fundamental research. Rather than passively tracking a specific index, portfolio weights are flexibly adjusted in response to market conditions.
- Active mid- and small-cap stock selection strategy
- Use of a non-disclosed holdings model to protect the strategy
Size and Cost
Assets under management (AUM) stand at $889.5M, with a total expense ratio of 0.65% per year.
Compared with similar ETFs such as DYNF and ARKK, it offers a higher concentration in mid- and small-cap names, while its non-disclosed management model prevents the trading strategy from being exposed.
Performance and Flows
1-Year Price Performance
Dividend & Yield
52-Week Price RangeSince launch, the fund has shown growth accompanied by volatility, benefiting from the resilient recovery of the mid- and small-cap segment. It tends to exhibit relatively higher volatility than large-cap names.
Demand for active management in the mid- and small-cap space is driving inflows, and fund flows tend to react sensitively to changes in interest-rate outlook and economic-cycle conditions.
Strengths and Weaknesses
Stock-picking ability through active management is the core differentiator, while a higher expense ratio versus passive ETFs and the transparency constraints of the non-disclosed model are key considerations.
💪 Key Strengths
⚠️ Points to Watch
Alternative ETFs and Related Products
The DYNF, THRO, and ARKK shown in the table are comparable mid- and small-cap-related products, each with different active themes, while DFSU is a mid- and small-cap alternative that applies sustainability criteria. If you prefer low-cost passive index-tracking products, you can also consider IJR (S&P 600), IJH (S&P 400), or IWM, which tracks the Russell 2000. For broader mid- and small-cap exposure, VB is also a solid choice.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 DYNF | iShares U.S. Equity Factor Rotation Active ETF | $70.05 | -0.4% | $42.0B | 0.26% | 0.77% | +21.3% |
 THRO | iShares U.S. Thematic Rotation Active ETF | $44.08 | -0.3% | $6.9B | 0.57% | 0.25% | +18.6% |
 ARKK | ARK Innovation ETF | $86.22 | -1.1% | $6.5B | 0.75% | - | +14.9% |
 JMEE | JPMorgan Small & Mid Cap Enhanced Equity ETF | $76.93 | +0.3% | $2.9B | 0.24% | 0.94% | +21.5% |
 PSC | Principal U.S. Small-Cap ETF | $69.19 | -0.1% | $2.7B | 0.38% | 0.52% | +23.4% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
 MOD | Modine Manufacturing Co | 0.03% | $194.66 | +4.3% | $10.3B | 73.4 | - |
 BELFB | Bel Fuse Inc | 0.03% | $243.45 | +1.5% | $3.4B | 63.2 | 0.11% |
 ENVA | Enova International Inc | 0.03% | $230.58 | -1.1% | $5.7B | 17.1 | - |
| BELFB | Bel Fuse Inc | 0.03% | $243.45 | +1.5% | $3.4B | 63.2 | 0.11% |
 SN | SharkNinja Inc | 0.03% | $173.38 | -1.0% | $24.4B | 35.4 | - |
| COHR | Coherent Corp | 0.03% | $281.86 | +6.6% | $55.2B | 68.5 | 0.01% |
 LMB | Limbach Holdings Inc | 0.03% | $49.86 | +0.6% | $594.6M | 19.9 | - |
 TPB | Turning Point Brands Inc | 0.03% | $75.22 | -2.2% | $1.5B | 32.4 | 0.43% |
 ESI | Element Solutions Inc | 0.03% | $36.01 | +2.9% | $8.8B | 49.1 | 0.67% |
| MOD | Modine Manufacturing Co | 0.03% | $194.66 | +4.3% | $10.3B | 73.4 | - |
Investor Checklist
Below are the key checkpoints to review before investing in TSME. It is important to clearly understand the characteristics of active management, the cost structure, and the nature of the mid- and small-cap market that is the investment universe.
| Checkpoint | What to Verify | Current Status |
|---|---|---|
| 💵 Total Expense Ratio | Confirm higher management costs versus passive products | Fees being charged |
| 🔍 Active Strategy | Evaluate the fund manager's stock-picking ability | Performance tracking required |
| 📊 Mid- and Small-Cap Allocation | Check market-cap distribution within the portfolio | Mid- and small-cap centric |
| 🏢 Manager Credibility | Review Thrivent's investment philosophy and track record | Stable management |
The high volatility inherent to mid- and small-cap names and the performance uncertainty of active management are the main risks. In particular, note that during market downturns, drawdowns may be deeper than those of passive products.
It can be a suitable option for investors seeking active mid- and small-cap exposure in pursuit of market-beating returns. However, it is advisable to size positions carefully after fully accounting for the fee differential and the non-disclosed nature of the management approach.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
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