Brandes U.S. Small-Mid Cap Value ETF

Brandes U.S. Small-Mid Cap Value ETF (BSMC) is an actively managed fund. Its manager, Brandes Investment Partners, picks about 70 small and mid-size U.S. companies that it judges to be trading below their true worth, such as Ingles Markets and International Flavors & Fragrances. Unlike most similar funds, it relies on a manager's stock picks rather than an index. It also costs more: its 0.71% expense ratio is well above the 0.20% average for similar funds.

• Over the year to Oct 27, 2026, BSMC returned +17.9%, 6th of 7 among similar funds.
• Its worst full calendar year was 2024 (+10.2%); its best was 2025 (+15.5%).
• The deepest fall in its price history was 19.2% (Nov 25, 2024 to Apr 8, 2025), recovered by Jul 1, 2025.

As of Jun 30, 2026, the fund held 69 securities; the ten largest made up 24.61% of assets, and 3.94% sat in cash and money-market holdings.

• Over the three months to Jun 30, 2026, investors added a net $186K (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +5.65%, -1.26%, +3.22%.

BSMC does not track an index. Its advisor, Brandes Investment Partners, uses value investing. It estimates each company's "intrinsic" value, meaning what the business is worth based on its earnings, cash flow and assets. Then it buys stocks selling below that estimate. It may sell when a stock's price reaches the estimate, or when it sees better opportunities elsewhere. The prospectus lists portfolio turnover at 5%, so the manager replaces only a small part of the portfolio each year.

Under normal conditions, at least 80% of net assets goes into U.S. value companies of a size that fits within the Russell 2500 Index. As of July 1, 2026, that range ran from about $12.4 million to $29.4 billion in market value. A company counts as "value" if it belongs to the MSCI ACWI Value Investable Market Index or the Russell 3000 Value Index, or if Brandes judges it undervalued. The fund can also own companies outside the U.S., including in emerging and frontier markets.

No formula sets the weights. No single company can be more than 5% of assets when it is bought, and one sector, such as health care, can be more than 20%. As of June 30, 2026, the fund held 69 stocks. The top 10 made up 24.6% of assets, cash was 3.9%, and it held no derivatives. Cash can sometimes become a large part of the portfolio.

• BSMC charges 0.71% a year, versus an average of 0.2% for the similar funds below (7th of 7, cheapest first).
• Of that, 0.7% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $73 in the first year and $883 over 10 years (assuming a 5% annual return).

It holds smaller, out-of-favor U.S. companies chosen by a value manager, and over the past year it moved less than the broad market.

BSMC can add smaller, out-of-favor U.S. companies that large-company index funds mostly leave out. Over the year to October 27, 2026, its beta was 0.63. Beta measures how much a fund moves when the market moves. The fund launched in October 2023, so it has no record from the 2008, 2020 or 2022 sell-offs. Its deepest drop was 19.2%, from November 25, 2024 to April 8, 2025. It recovered by July 1, 2025, about 2.8 months later. Its weakest full year, 2024, still gained 10.2%. Anyone who sold near the April 2025 low would have locked in the loss. Income is small: the trailing yield was 0.96% as of October 27, 2026, paid quarterly. In the SEC's standard example, fees on $10,000 add up to $883 over 10 years. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by closest holdings overlap from the latest N-PORT reports (no similar fund shares 20% or more of its holdings).