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Is John Hancock Multifactor Mid Cap ETF (JHMM) a Strong ETF Right Now?
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Launched on 09/28/2015, the John Hancock Multifactor Mid Cap ETF (JHMM - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by John Hancock. JHMM has been able to amass assets over $2.53 billion, making it one of the larger ETFs in the Style Box - Mid Cap Blend. This particular fund seeks to match the performance of the John Hancock Dimensional Mid Cap Index before fees and expenses.
The John Hancock Dimensional Mid Cap Index comprises of a subset of securities in the U.S. Universe issued by companies whose market capitalizations are between the 200th and 951st largest U.S. company.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.41%.
JHMM's 12-month trailing dividend yield is 0.98%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For JHMM, it has heaviest allocation in the Industrials sector --about 16.30% of the portfolio --while Information Technology and Financials round out the top three.
Looking at individual holdings, Occidental Petroleum Corp (OXY - Free Report) accounts for about 0.65% of total assets, followed by Dollar Tree Inc (DLTR - Free Report) and Republic Services Inc (RSG - Free Report) .
Its top 10 holdings account for approximately 4.54% of JHMM's total assets under management.
Performance and Risk
Year-to-date, the John Hancock Multifactor Mid Cap ETF has lost about -16.82% so far, and is down about -16.85% over the last 12 months (as of 11/07/2022). JHMM has traded between $42.60 and $56.63 in this past 52-week period.
The fund has a beta of 1.08 and standard deviation of 27.25% for the trailing three-year period, which makes JHMM a medium risk choice in this particular space. With about 665 holdings, it effectively diversifies company-specific risk.
Alternatives
John Hancock Multifactor Mid Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard MidCap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P MidCap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard MidCap ETF has $48.43 billion in assets, iShares Core S&P MidCap ETF has $61.68 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is John Hancock Multifactor Mid Cap ETF (JHMM) a Strong ETF Right Now?
Launched on 09/28/2015, the John Hancock Multifactor Mid Cap ETF (JHMM - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by John Hancock. JHMM has been able to amass assets over $2.53 billion, making it one of the larger ETFs in the Style Box - Mid Cap Blend. This particular fund seeks to match the performance of the John Hancock Dimensional Mid Cap Index before fees and expenses.
The John Hancock Dimensional Mid Cap Index comprises of a subset of securities in the U.S. Universe issued by companies whose market capitalizations are between the 200th and 951st largest U.S. company.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.41%.
JHMM's 12-month trailing dividend yield is 0.98%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
For JHMM, it has heaviest allocation in the Industrials sector --about 16.30% of the portfolio --while Information Technology and Financials round out the top three.
Looking at individual holdings, Occidental Petroleum Corp (OXY - Free Report) accounts for about 0.65% of total assets, followed by Dollar Tree Inc (DLTR - Free Report) and Republic Services Inc (RSG - Free Report) .
Its top 10 holdings account for approximately 4.54% of JHMM's total assets under management.
Performance and Risk
Year-to-date, the John Hancock Multifactor Mid Cap ETF has lost about -16.82% so far, and is down about -16.85% over the last 12 months (as of 11/07/2022). JHMM has traded between $42.60 and $56.63 in this past 52-week period.
The fund has a beta of 1.08 and standard deviation of 27.25% for the trailing three-year period, which makes JHMM a medium risk choice in this particular space. With about 665 holdings, it effectively diversifies company-specific risk.
Alternatives
John Hancock Multifactor Mid Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard MidCap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P MidCap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard MidCap ETF has $48.43 billion in assets, iShares Core S&P MidCap ETF has $61.68 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.