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Should John Hancock Multifactor Mid Cap ETF (JHMM) Be on Your Investing Radar?

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If you're interested in broad exposure to the Mid Cap Blend segment of the US equity market, look no further than the John Hancock Multifactor Mid Cap ETF (JHMM - Free Report) , a passively managed exchange traded fund launched on 09/28/2015.

The fund is sponsored by John Hancock. It has amassed assets over $430.42 M, making it one of the average sized ETFs attempting to match the Mid Cap Blend segment of the US equity market.

Why Mid Cap Blend

With market capitalization between $2 billion and $10 billion, mid cap companies usually contain higher growth prospects than large cap companies, and are considered less risky than their small cap counterparts. Thus, companies that fall under this category provide a stable and growth-heavy investment.

Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.

Costs

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 0.45%, making it one of the more expensive products in the space.

It has a 12-month trailing dividend yield of 0.87%.

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 Information Technology sector--about 18.60% of the portfolio. Industrials and Financials round out the top three.

Looking at individual holdings, Jh Collateral accounts for about 3.06% of total assets, followed by Netapp Inc (NTAP - Free Report) and Centene Corp (CNC - Free Report) .

Performance and Risk

JHMM seeks to match the performance of the John Hancock Dimensional Mid Cap Index before fees and expenses. 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.

The ETF has gained about 6.44% so far this year and was up about 16.91% in the last one year (as of 08/10/2018). In the past 52-week period, it has traded between $30.70 and $36.29.

The ETF has a beta of 1.02 and standard deviation of 12.66% for the trailing three-year period, making it a medium risk choice in the space. With about 689 holdings, it effectively diversifies company-specific risk.

Alternatives

John Hancock Multifactor Mid Cap ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, JHMM is an excellent option for investors seeking exposure to the Mid Cap ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Mid-Cap ETF (VO - Free Report) and the iShares Core S&P Mid-Cap ETF (IJH - Free Report) track a similar index. While Vanguard Mid-Cap ETF has $23.95 B in assets, iShares Core S&P Mid-Cap ETF has $48.94 B. VO has an expense ratio of 0.05% and IJH charges 0.07%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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.



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