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Is John Hancock Multifactor Mid Cap ETF (JHMM) a Strong ETF Right Now?

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Designed to provide broad exposure to the Style Box - Mid Cap Blend category of the market, the John Hancock Multifactor Mid Cap ETF (JHMM) is a smart beta exchange traded fund launched on 09/28/2015.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

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.

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.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Managed by John Hancock, JHMM has amassed assets over $2.31 billion, making it one of the average sized ETFs in the Style Box - Mid Cap Blend. JHMM, before fees and expenses, seeks to match the performance of the John Hancock Dimensional Mid Cap Index.

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.

Cost & Other Expenses

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

Annual operating expenses for this ETF are 0.42%, making it one of the more expensive products in the space.

It has a 12-month trailing dividend yield of 0.76%.

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.

Representing 19.50% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Healthcare round out the top three.

Looking at individual holdings, Marvell Technology Inc (MRVL) accounts for about 0.53% of total assets, followed by Parker Hannifin Corp (PH) and Skyworks Solutions Inc (SWKS).

JHMM's top 10 holdings account for about 4.13% of its total assets under management.

Performance and Risk

The ETF has gained about 18.68% so far this year and is up roughly 41.97% in the last one year (as of 08/02/2021). In the past 52-week period, it has traded between $36.29 and $52.52.

JHMM has a beta of 1.13 and standard deviation of 25.24% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 670 holdings, it effectively diversifies company-specific risk.

Alternatives

John Hancock Multifactor Mid Cap ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.

Vanguard MidCap ETF (VO) tracks CRSP US Mid Cap Index and the iShares Core S&P MidCap ETF (IJH) tracks S&P MidCap 400 Index. Vanguard MidCap ETF has $50.52 billion in assets, iShares Core S&P MidCap ETF has $63.34 billion. VO has an expense ratio of 0.04% and IJH charges 0.05%.

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 - Mid 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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John Hancock Multifactor Mid Cap ETF (JHMM): ETF Research Reports
 
ParkerHannifin Corporation (PH) : Free Stock Analysis Report
 
Skyworks Solutions, Inc. (SWKS) : Free Stock Analysis Report
 
Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report
 
iShares Core S&P MidCap ETF (IJH): ETF Research Reports
 
Vanguard MidCap ETF (VO): ETF Research Reports
 
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