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Should John Hancock Multifactor Mid Cap ETF (JHMM) Be on Your Investing Radar?

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Looking for broad exposure to the Mid Cap Blend segment of the US equity market? You should consider the John Hancock Multifactor Mid Cap ETF (JHMM - Free Report) , a passively managed exchange traded fund launched on 09/28/2015.

The fund is sponsored by John Hancock. It has amassed assets over $2.37 billion, making it one of the average sized ETFs attempting to match the Mid Cap Blend segment of the US equity market.

Why Mid Cap Blend

Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus, companies that fall under this category provide a stable and growth-heavy investment.

Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.

Costs

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 counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.42%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.76%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 19.10% of the portfolio. Industrials and Financials round out the top three.

Looking at individual holdings, Marvell Technology Inc (MRVL - Free Report) accounts for about 0.53% of total assets, followed by Parker Hannifin Corp (PH - Free Report) and Skyworks Solutions Inc (SWKS - Free Report) .

The top 10 holdings account for about 4.13% of total assets under management.

Performance and Risk

JHMM 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.

The ETF has added roughly 18.50% so far this year and was up about 31.96% in the last one year (as of 10/12/2021). In the past 52-week period, it has traded between $37.93 and $54.37.

The ETF has a beta of 1.12 and standard deviation of 25.30% for the trailing three-year period, making it a medium risk choice in the space. With about 670 holdings, it effectively diversifies company-specific risk.

Alternatives

John Hancock Multifactor Mid Cap ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, JHMM is a good option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

The Vanguard MidCap ETF (VO - Free Report) and the iShares Core S&P MidCap ETF (IJH - Free Report) track a similar index. While Vanguard MidCap ETF has $51.31 billion in assets, iShares Core S&P MidCap ETF has $62.80 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

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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