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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?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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.

The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.

Fund Sponsor & Index

The fund is managed by John Hancock, and has been able to amass over $750.94 million, which makes 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

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 cousins, other things remaining the same.

Annual operating expenses for this ETF are 0.29%, making it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 1.41%.

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.

JHML's heaviest allocation is in the Information Technology sector, which is about 22.30% of the portfolio. Its Healthcare and Financials round out the top three.

When you look at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 3.46% of the fund's total assets, followed by Apple Inc (AAPL - Free Report) and Inc (AMZN - Free Report) .

JHML's top 10 holdings account for about 15.01% of its total assets under management.

Performance and Risk

The ETF has added about 3.51% so far this year and is down about -7.50% in the last one year (as of 01/23/2023). In the past 52-week period, it has traded between $45.43 and $57.85.

The ETF has a beta of 1.01 and standard deviation of 25.33% for the trailing three-year period, making it a medium risk choice in the space. With about 771 holdings, it effectively diversifies company-specific risk.


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 $298.01 billion in assets, SPDR S&P 500 ETF has $369.88 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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