Technology

Should John Hancock Multifactor Large Cap ETF (JHML) Be on Your Investing Radar?

The John Hancock Multifactor Large Cap ETF (JHML) was launched on 09/28/2015, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.

The fund is sponsored by John Hancock. It has amassed assets over $925.01 M, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.

Why Large Cap Blend

Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

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

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 0.34%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.49%.

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 20.50% of the portfolio. Financials and Healthcare round out the top three.

Looking at individual holdings, Apple Inc (AAPL) accounts for about 3.24% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc Cdi (AMZN).

The top 10 holdings account for about 13.3% of total assets under management.

Performance and Risk

JHML seeks to match the performance of the John Hancock Dimensional Large Cap Index before fees and expenses. The John Hancock Dimensional Large Cap Index comprises of a subset of securities in the U.S. Universe issued by companies whose market capitalizations are larger than that of the 801st largest U.S. company.

The ETF return is roughly 24.85% so far this year and is up about 13.25% in the last one year (as of 11/07/2019). In the past 52-week period, it has traded between $30.10 and $39.70.

The ETF has a beta of 1.04 and standard deviation of 12.48% for the trailing three-year period, making it a medium risk choice in the space. With about 785 holdings, it effectively diversifies company-specific risk.

Alternatives

John Hancock Multifactor Large Cap ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, JHML is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.

The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $193.47 B in assets, SPDR S&P 500 ETF has $280.16 B. IVV has an expense ratio of 0.04% and SPY charges 0.09%.

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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John Hancock Multifactor Large Cap ETF (JHML): ETF Research Reports

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iShares Core S&P 500 ETF (IVV): ETF Research Reports

SPDR S&P 500 ETF (SPY): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.