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Is John Hancock Multifactor Large Cap ETF (JHML) a Strong ETF Right Now?

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The John Hancock Multifactor Large Cap ETF (JHML - Free Report) 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?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

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.

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.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

Managed by John Hancock, JHML has amassed assets over $718.74 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. JHML seeks to match the performance of the John Hancock Dimensional Large Cap Index before fees and expenses.

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

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

Operating expenses on an annual basis are 0.29% for JHML, making it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.31%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

JHML's heaviest allocation is in the Information Technology sector, which is about 23.10% of the portfolio. Its Healthcare and Financials round out the top three.

Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.97% of total assets, followed by Apple Inc (AAPL - Free Report) and Amazon.com Inc (AMZN - Free Report) .

JHML's top 10 holdings account for about 16.6% of its total assets under management.

Performance and Risk

The ETF has lost about -19% so far this year and is down about -11.44% in the last one year (as of 09/22/2022). In the past 52-week period, it has traded between $46.37 and $59.70.

JHML has a beta of 1.01 and standard deviation of 24.38% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 780 holdings, it effectively diversifies company-specific risk.

Alternatives

John Hancock Multifactor Large Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.

IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $284.31 billion in assets, SPDR S&P 500 ETF has $340.34 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.

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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