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Is John Hancock Multifactor Mid Cap ETF (JHMM) a Strong ETF Right Now?
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A smart beta exchange traded fund, the John Hancock Multifactor Mid Cap ETF (JHMM - Free Report) debuted on 09/28/2015, and offers broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by John Hancock. It has amassed assets over $3.85 billion, making it one of the larger ETFs in the Style Box - Mid Cap Blend. JHMM, before fees and expenses, seeks to match the performance of the John Hancock Dimensional Mid Cap Index.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for JHMM are 0.42%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.05%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For JHMM, it has heaviest allocation in the Industrials sector --about 19.30% of the portfolio --while Financials and Information Technology round out the top three.
Taking into account individual holdings, United Rentals Inc (URI - Free Report) accounts for about 0.62% of the fund's total assets, followed by Lennar Corp A (LEN - Free Report) and Hartford Financial Svcs Grp (HIG - Free Report) .
Its top 10 holdings account for approximately 4.77% of JHMM's total assets under management.
Performance and Risk
The ETF has added about 10.25% so far this year and was up about 19.85% in the last one year (as of 08/22/2024). In the past 52-week period, it has traded between $44.18 and $58.04.
JHMM has a beta of 1.08 and standard deviation of 18.97% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 664 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 Mid-Cap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $66.95 billion in assets, iShares Core S&P Mid-Cap ETF has $88.52 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?
A smart beta exchange traded fund, the John Hancock Multifactor Mid Cap ETF (JHMM - Free Report) debuted on 09/28/2015, and offers broad exposure to the Style Box - Mid Cap Blend category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by John Hancock. It has amassed assets over $3.85 billion, making it one of the larger ETFs in the Style Box - Mid Cap Blend. JHMM, before fees and expenses, seeks to match the performance of the John Hancock Dimensional Mid Cap Index.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for JHMM are 0.42%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.05%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
For JHMM, it has heaviest allocation in the Industrials sector --about 19.30% of the portfolio --while Financials and Information Technology round out the top three.
Taking into account individual holdings, United Rentals Inc (URI - Free Report) accounts for about 0.62% of the fund's total assets, followed by Lennar Corp A (LEN - Free Report) and Hartford Financial Svcs Grp (HIG - Free Report) .
Its top 10 holdings account for approximately 4.77% of JHMM's total assets under management.
Performance and Risk
The ETF has added about 10.25% so far this year and was up about 19.85% in the last one year (as of 08/22/2024). In the past 52-week period, it has traded between $44.18 and $58.04.
JHMM has a beta of 1.08 and standard deviation of 18.97% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 664 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 Mid-Cap ETF (VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $66.95 billion in assets, iShares Core S&P Mid-Cap ETF has $88.52 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.