Active strategies may prove beneficial in volatile, complex markets this year. Equity investors looking to diversify away from large-cap concentration should consider the +Neuberger Berman Small-Mid Cap ETF+ (NBSM ) for its performance versus the benchmark year-to-date.
The onset of U.S. tariffs on Mexico and Canada sent markets plummeting this week while volatility climbed. The continuously morphing economic policies of the current administration coupled with knock-on inflation impacts of tariffs continue to create heightened levels of uncertainty and concern for investors in the opening months of the year.
It’s the kind of environment that may favor active strategies. The ability of active managers to respond to changing market conditions while offering more discerning exposures to asset classes could prove advantageous. Within small- and midcaps — an already more volatile equity category — these benefits may be magnified.
The Neuberger Berman Small-Mid Cap ETF (NBSM) is actively managed and offers exposure to quality companies within the SMIDcap category. The fund managers use bottom-up analysis when evaluating companies. NBSM focuses on quality companies that generate reliable free cash flow and elevated profitability. The companies also have conservative balance sheets and business models that set them apart from peers. The overall approach to SMIDcap investing results in a diversified portfolio compared to benchmarks.
See also: Neuberger Berman’s Reiner on Big Teams in Small-Caps
The strategy also seeks to mitigate the elevated volatility inherent in small- and midcap investing while reducing downside risk. The strategy offers the potential of a smoother ride for investors within this more volatile equity asset class.
During the sharp market drawdowns at the beginning of March, NBSM trimmed losses. The fund fell 2.52% on a total return basis between March 1 and 4, 2025 according to Y-Charts data. Over the same time period, the benchmark Russell 2500 declined -3.9%. Year-to-date the fund also curbed losses compared to the benchmark. NBSM is currently down 3.51% compared to the Russell 2500’s 5.16% losses on a total return basis.
NBSM carries an expense ratio of 0.74%.
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