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Is John Hancock Multifactor Small Cap ETF (JHSC) a Strong ETF Right Now?
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Launched on 11/08/2017, the John Hancock Multifactor Small Cap ETF (JHSC - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by John Hancock. It has amassed assets over $347.13 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the JOHN HANCOCK DIMENSIONAL SMALL CAP INDEX.
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.
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.
Operating expenses on an annual basis are 0.42% for this ETF, which makes it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.05%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
JHSC's heaviest allocation is in the Industrials sector, which is about 22% of the portfolio. Its Financials and Information Technology round out the top three.
When you look at individual holdings, Emcor Group Inc (EME - Free Report) accounts for about 0.55% of the fund's total assets, followed by Iridium Communications Inc (IRDM - Free Report) and Renaissancere Holdings Ltd (RNR - Free Report) .
The top 10 holdings account for about 4.98% of total assets under management.
Performance and Risk
So far this year, JHSC return is roughly 8.07%, and is up about 1.20% in the last one year (as of 02/27/2023). During this past 52-week period, the fund has traded between $28.05 and $35.22.
The ETF has a beta of 1.13 and standard deviation of 28.96% for the trailing three-year period. With about 391 holdings, it effectively diversifies company-specific risk.
Alternatives
John Hancock Multifactor Small Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $55.07 billion in assets, iShares Core S&P Small-Cap ETF has $70.76 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 - Small 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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Is John Hancock Multifactor Small Cap ETF (JHSC) a Strong ETF Right Now?
Launched on 11/08/2017, the John Hancock Multifactor Small Cap ETF (JHSC - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by John Hancock. It has amassed assets over $347.13 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the JOHN HANCOCK DIMENSIONAL SMALL CAP INDEX.
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.
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.
Operating expenses on an annual basis are 0.42% for this ETF, which makes it one of the more expensive products in the space.
It has a 12-month trailing dividend yield of 1.05%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
JHSC's heaviest allocation is in the Industrials sector, which is about 22% of the portfolio. Its Financials and Information Technology round out the top three.
When you look at individual holdings, Emcor Group Inc (EME - Free Report) accounts for about 0.55% of the fund's total assets, followed by Iridium Communications Inc (IRDM - Free Report) and Renaissancere Holdings Ltd (RNR - Free Report) .
The top 10 holdings account for about 4.98% of total assets under management.
Performance and Risk
So far this year, JHSC return is roughly 8.07%, and is up about 1.20% in the last one year (as of 02/27/2023). During this past 52-week period, the fund has traded between $28.05 and $35.22.
The ETF has a beta of 1.13 and standard deviation of 28.96% for the trailing three-year period. With about 391 holdings, it effectively diversifies company-specific risk.
Alternatives
John Hancock Multifactor Small Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $55.07 billion in assets, iShares Core S&P Small-Cap ETF has $70.76 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 - Small 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.