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

Sweta Killa
Brady (BRC) is likely to gain from product development, improvement in manufacturing facilities and focus on driving operational excellence. Investments to expand capacity are other tailwinds.

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 $962.74 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

Compared to large and small cap companies, mid cap businesses tend to have higher growth prospects and are less volatile, respectively, with market capitalization between $2 billion and $10 billion. Thus, companies that fall under this category provide a stable and growth-heavy investment.

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

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

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 1.17%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 17.90% of the portfolio. Industrials and Financials round out the top three.

Looking at individual holdings, Jh Collateral accounts for about 1.05% of total assets, followed by Edwards Lifesciences Corp (EW) and Xilinx Inc (XLNX).

The top 10 holdings account for about 4.33% 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 gained about 16.06% so far this year and is up about 1.89% in the last one year (as of 03/22/2019). 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 12.73% for the trailing three-year period, making it a medium risk choice in the space. With about 703 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 reasonable 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 $25.08 B in assets, iShares Core S&P Mid-Cap ETF has $48.44 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
 
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
 
Xilinx, Inc. (XLNX) : Free Stock Analysis Report
 
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