Should John Hancock Multifactor Mid Cap ETF (JHMM) Be on Your Investing Radar?
Designed to provide broad exposure to the Mid Cap Blend segment of the US equity market, the John Hancock Multifactor Mid Cap ETF (JHMM) is a passively managed exchange traded fund launched on 09/28/2015.
The fund is sponsored by John Hancock. It has amassed assets over $867.34 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
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
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 1.21%.
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 17.70% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Jh Collateral accounts for about 1.03% of total assets, followed by United Continental Holdings (UAL) and Edwards Lifesciences Corp (EW).
The top 10 holdings account for about 4.34% 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 11.96% so far this year and is up roughly 3.77% in the last one year (as of 02/12/2019). 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 13.29% for the trailing three-year period, making it a medium risk choice in the space. With about 704 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 good 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 $24.01 B in assets, iShares Core S&P Mid-Cap ETF has $47.02 B. VO has an expense ratio of 0.05% and IJH charges 0.07%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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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iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports
Vanguard Mid-Cap ETF (VO): ETF Research Reports
Edwards Lifesciences Corporation (EW) : Free Stock Analysis Report
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