Designed to provide broad exposure to the Small Cap Blend segment of the US equity market, the John Hancock Multifactor Small Cap ETF (
JHSC Quick Quote JHSC - Free Report) is a passively managed exchange traded fund launched on 11/08/2017.
The fund is sponsored by John Hancock. It has amassed assets over $411.93 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.42%, making it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.15%.
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 to the Industrials sector--about 18.10% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Regal Rexnord Corp (
RRX Quick Quote RRX - Free Report) accounts for about 0.59% of total assets, followed by Brooks Automation Inc and Wyndham Hotels + Resorts Inc ( WH Quick Quote WH - Free Report) .
The top 10 holdings account for about 4.23% of total assets under management.
Performance and Risk
JHSC seeks to match the performance of the JOHN HANCOCK DIMENSIONAL SMALL CAP INDEX before fees and expenses. The John Hancock Dimensional Small Cap Index is designed to comprise a subset of securities in the U.S. Universe issued by companies whose market capitalizations are smaller than the 750th largest U.S. company but excluding the smallest 4% of U.S. companies at the time of reconstitution.
The ETF has lost about -6.70% so far this year and is up roughly 2.70% in the last one year (as of 03/03/2022). In the past 52-week period, it has traded between $32.26 and $37.86.
The ETF has a beta of 1.17 and standard deviation of 26.65% for the trailing three-year period. With about 467 holdings, it effectively diversifies company-specific risk.
John Hancock Multifactor Small 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, JHSC is a reasonable option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 2000 ETF (
IWM Quick Quote IWM - Free Report) and the iShares Core S&P SmallCap ETF ( IJR Quick Quote IJR - Free Report) track a similar index. While iShares Russell 2000 ETF has $62.13 billion in assets, iShares Core S&P SmallCap ETF has $71.51 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%. Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they 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.