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

Zacks Equity Research

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

The fund is sponsored by John Hancock. It has amassed assets over $1.36 billion, 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 have market capitalization between $2 billion and $10 billion. They usually have higher growth prospects than large cap companies and are less volatile than small cap companies. Thus they have a nice balance of growth potential and stability.

Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.

Costs

Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 1.22%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, 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 20.30% of the portfolio. Industrials and Healthcare round out the top three.

Looking at individual holdings, Ansys Inc (ANSS) accounts for about 0.47% of total assets, followed by Akamai Technologies Inc (AKAM) and Synopsys Inc (SNPS).

The top 10 holdings account for about 3.55% 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 lost about -19.79% so far this year and is down about -13.30% in the last one year (as of 05/11/2020). In the past 52-week period, it has traded between $24 and $40.48.

The ETF has a beta of 1.17 and standard deviation of 23.18% for the trailing three-year period, making it a medium risk choice in the space. With about 692 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 MidCap ETF (VO) and the iShares Core SP MidCap ETF (IJH) track a similar index. While Vanguard MidCap ETF has $26.93 billion in assets, iShares Core SP MidCap ETF has $40.66 billion. VO has an expense ratio of 0.04% and IJH charges 0.06%.

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
 
Akamai Technologies Inc (AKAM) : Free Stock Analysis Report
 
Synopsys Inc (SNPS) : Free Stock Analysis Report
 
ANSYS Inc (ANSS) : Free Stock Analysis Report
 
iShares Core SP MidCap ETF (IJH): ETF Research Reports
 
Vanguard MidCap ETF (VO): ETF Research Reports
 
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