Back to top

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

Read MoreHide Full Article

Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the John Hancock Multifactor Mid Cap ETF (JHMM - Free Report) is a passively managed exchange traded fund launched on 09/28/2015.

The fund is sponsored by John Hancock. It has amassed assets over $1.02 B, 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

Mid cap companies, with market capitalization in the range of $2 billion and $10 billion, offer investors many things that small and large companies don't, including less risk and higher growth opportunities. These types of companies, then, have a good balance of stability and growth potential.

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 1.15%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector--about 17.60% of the portfolio. Industrials and Financials round out the top three.

Looking at individual holdings, United Continental Holdings (UAL - Free Report) accounts for about 0.48% of total assets, followed by Amphenol Corp Cl A (APH - Free Report) and Parker Hannifin Corp (PH - Free Report) .

The top 10 holdings account for about 3.29% of total assets under management.

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 added about 17.94% so far this year and is up roughly 5.35% in the last one year (as of 05/09/2019). In the past 52-week period, it has traded between $28.59 and $36.91.

The ETF has a beta of 1.10 and standard deviation of 12.74% for the trailing three-year period, making it a medium risk choice in the space. With about 684 holdings, it effectively diversifies company-specific risk.

Alternatives

John Hancock Multifactor Mid 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, JHMM is a sufficient option for those seeking exposure to the Style Box - Mid Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

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 $25.32 B in assets, iShares Core S&P Mid-Cap ETF has $49.61 B. VO has an expense ratio of 0.04% and IJH charges 0.07%.

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.

Published in