Should John Hancock Multifactor Mid Cap ETF (JHMM) Be on Your Investing Radar?
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 $1.50 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
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 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
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 0.44%, 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
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 18.20% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Global Payments Inc (GPN) accounts for about 0.77% of total assets, followed by United Airlines Holdings Inc (UAL) and Parker Hannifin Corp (PH).
The top 10 holdings account for about 3.56% 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 27.41% so far this year and was up about 17.12% in the last one year (as of 12/09/2019). In the past 52-week period, it has traded between $28.59 and $38.86.
The ETF has a beta of 1.09 and standard deviation of 12.90% for the trailing three-year period, making it a medium risk choice in the space. With about 687 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 $28.81 B in assets, iShares Core S&P Mid-Cap ETF has $52.75 B. VO has an expense ratio of 0.04% and IJH charges 0.07%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also 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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John Hancock Multifactor Mid Cap ETF (JHMM): ETF Research Reports
United Airlines Holdings Inc (UAL) : Free Stock Analysis Report
iShares Core S&P Mid-Cap ETF (IJH): ETF Research Reports
Vanguard Mid-Cap ETF (VO): ETF Research Reports
Parker-Hannifin Corporation (PH) : Free Stock Analysis Report
Global Payments Inc. (GPN) : Free Stock Analysis Report
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