Is John Hancock Multifactor Large Cap ETF (JHML) a Strong ETF Right Now?
Smart Beta ETF report for JHML
The John Hancock Multifactor Large Cap ETF (JHML) made its debut on 09/28/2015, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large 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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
Managed by John Hancock, JHML has amassed assets over $793.76 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the John Hancock Dimensional Large Cap Index.
The John Hancock Dimensional Large Cap Index comprises of a subset of securities in the U.S. Universe issued by companies whose market capitalizations are larger than that of the 801st 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.
Operating expenses on an annual basis are 0.29% for JHML, making it on par with most peer products in the space.
JHML's 12-month trailing dividend yield is 1.17%.
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.
Representing 24.90% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
Taking into account individual holdings, Microsoft Corp (MSFT) accounts for about 3.89% of the fund's total assets, followed by Apple Inc (AAPL) and Amazon.com Inc (AMZN).
Its top 10 holdings account for approximately 17.04% of JHML's total assets under management.
Performance and Risk
The ETF has added about 26.18% and is up about 31.93% so far this year and in the past one year (as of 11/12/2021), respectively. JHML has traded between $45.06 and $59.03 during this last 52-week period.
JHML has a beta of 1.02 and standard deviation of 22.95% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 786 holdings, it effectively diversifies company-specific risk.
John Hancock Multifactor Large Cap ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY) tracks S&P 500 Index. IShares Core S&P 500 ETF has $321.17 billion in assets, SPDR S&P 500 ETF has $422.97 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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 - Large Cap Blend.
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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JHMF LC (JHML): ETF Research Reports
Amazon.com (AMZN): Free Stock Analysis Report
Apple (AAPL): Free Stock Analysis Report
Microsoft (MSFT): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
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