Should John Hancock Multifactor Mid Cap ETF (JHMM) Be on Your Investing Radar?
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), a passively managed exchange traded fund launched on 09/28/2015.
The fund is sponsored by John Hancock. It has amassed assets over $1.01 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
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. These types of companies, then, have a good balance of stability and growth potential.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
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 counterparts, other things remaining 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 1.14%.
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 17.70% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Jh Collateral accounts for about 1.70% of total assets, followed by United Continental Holdings (UAL) and Amphenol Corp Cl A (APH).
The top 10 holdings account for about 4.56% 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 roughly 19.45% so far this year and is up about 7.65% in the last one year (as of 04/16/2019). 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 12.76% for the trailing three-year period, making it a medium risk choice in the space. With about 685 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) and the iShares Core S&P Mid-Cap ETF (IJH) track a similar index. While Vanguard Mid-Cap ETF has $25.74 B in assets, iShares Core S&P Mid-Cap ETF has $50.15 B. VO has an expense ratio of 0.05% and IJH charges 0.07%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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
United Continental Holdings, Inc. (UAL) : Free Stock Analysis Report
Amphenol Corporation (APH) : Free Stock Analysis Report
iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports
Vanguard Mid-Cap ETF (VO): ETF Research Reports
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