The John Hancock Multifactor Mid Cap ETF (
JHMM Quick Quote JHMM - Free Report) was launched on 09/28/2015, and is a smart beta exchange traded fund designed to offer 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.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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 $2.54 billion, making it one of the average sized 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 0.41%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 0.73%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 18.20% of the portfolio. Industrials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Parker Hannifin Corp (
PH Quick Quote PH - Free Report) accounts for about 0.43% of the fund's total assets, followed by United Rentals Inc ( URI Quick Quote URI - Free Report) and Laboratory Crp Of Amer Hldgs ( LH Quick Quote LH - Free Report) .
JHMM's top 10 holdings account for about 4.03% of its total assets under management.
Performance and Risk
Year-to-date, the John Hancock Multifactor Mid Cap ETF has added about 23.35% so far, and was up about 22.99% over the last 12 months (as of 12/16/2021). JHMM has traded between $44.28 and $56.63 in this past 52-week period.
The ETF has a beta of 1.11 and standard deviation of 25.12% for the trailing three-year period, making it a medium risk choice in the space. With about 673 holdings, it effectively diversifies company-specific risk.
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 Quick Quote VO - Free Report) tracks CRSP US Mid Cap Index and the iShares Core S&P MidCap ETF ( IJH Quick Quote IJH - Free Report) tracks S&P MidCap 400 Index. Vanguard MidCap ETF has $54.74 billion in assets, iShares Core S&P MidCap ETF has $66.11 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.
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.