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Is John Hancock Multifactor Small Cap ETF (JHSC) a Strong ETF Right Now?
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The John Hancock Multifactor Small Cap ETF (JHSC - Free Report) made its debut on 11/08/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
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
Managed by John Hancock, JHSC has amassed assets over $542.88 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. This particular fund 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.
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 on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.93%.
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.
JHSC's heaviest allocation is in the Industrials sector, which is about 21.50% of the portfolio. Its Financials and Information Technology round out the top three.
When you look at individual holdings, Credo Technology Group Holdi (CRDO - Free Report) accounts for about 0.96% of the fund's total assets, followed by Exelixis Inc (EXEL - Free Report) and Bath + Body Works Inc (BBWI - Free Report) .
Its top 10 holdings account for approximately 7.45% of JHSC's total assets under management.
Performance and Risk
The ETF has added about 3.52% and is up roughly 15.96% so far this year and in the past one year (as of 02/05/2025), respectively. JHSC has traded between $35.53 and $43.65 during this last 52-week period.
The fund has a beta of 1.13 and standard deviation of 20.28% for the trailing three-year period. With about 257 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 $75.17 billion in assets, iShares Core S&P Small-Cap ETF has $89.49 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?
The John Hancock Multifactor Small Cap ETF (JHSC - Free Report) made its debut on 11/08/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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.
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
Managed by John Hancock, JHSC has amassed assets over $542.88 million, making it one of the average sized ETFs in the Style Box - Small Cap Blend. This particular fund 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.
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 on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.93%.
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.
JHSC's heaviest allocation is in the Industrials sector, which is about 21.50% of the portfolio. Its Financials and Information Technology round out the top three.
When you look at individual holdings, Credo Technology Group Holdi (CRDO - Free Report) accounts for about 0.96% of the fund's total assets, followed by Exelixis Inc (EXEL - Free Report) and Bath + Body Works Inc (BBWI - Free Report) .
Its top 10 holdings account for approximately 7.45% of JHSC's total assets under management.
Performance and Risk
The ETF has added about 3.52% and is up roughly 15.96% so far this year and in the past one year (as of 02/05/2025), respectively. JHSC has traded between $35.53 and $43.65 during this last 52-week period.
The fund has a beta of 1.13 and standard deviation of 20.28% for the trailing three-year period. With about 257 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 $75.17 billion in assets, iShares Core S&P Small-Cap ETF has $89.49 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.