John Hancock Multifactor Small Cap ETF (JHSC)

Overview

The John Hancock Multifactor Small Cap ETF (JHSC) seeks to provide long-term growth of capital by investing primarily in a diversified portfolio of U.S. equity securities of small capitalization companies. The ETF employs a quantitative strategy that aims to capture the performance of factors historically associated with higher returns, such as value, momentum, and low volatility, while seeking to mitigate the impact of negative factors.

Reputation and Reliability

John Hancock, a unit of Manulife Financial Corporation, is a well-established and reputable financial services company with a long history in the investment management industry. They offer a broad range of investment products and services, known for their stability and customer-focused approach.

Management Expertise

The ETF is managed by an experienced team of investment professionals at John Hancock Investment Management, who utilize a systematic, rules-based approach driven by proprietary quantitative models. Their expertise lies in factor-based investing and quantitative equity research.

Goal

The primary investment goal of JHSC is to achieve long-term capital appreciation.

Investment Approach and Strategy

Strategy: JHSC does not track a specific index but rather employs a multifactor investment strategy. It aims to select U.S. small-cap stocks based on their exposure to specific investment factors.

Composition The ETF primarily holds U.S. equity securities of small capitalization companies that are selected based on their exposure to value, momentum, low volatility, and quality factors.

Market Share: Specific market share data for JHSC within the small-cap ETF sector is not readily available as a single percentage. However, it competes in a large and diverse segment of the ETF market.

Total Net Assets (AUM): 1654000000

Key Competitors

• iShares Russell 2000 ETF (IWM)
• Vanguard Small-Cap ETF (VB)
• iShares Core S&P Small-Cap ETF (IJR)

Competitive Landscape

The U.S. small-cap ETF market is highly competitive and crowded, with numerous ETFs tracking broad indices or employing various strategies. JHSC's multifactor approach differentiates it from simpler index-tracking ETFs. Its advantages lie in its systematic factor selection which aims for enhanced risk-adjusted returns. However, it faces challenges from larger, more established ETFs with lower expense ratios and greater liquidity.

Historical Performance: Performance data for JHSC is available over various time periods, including year-to-date, 1-year, 3-year, 5-year, and since inception. Investors should consult recent financial reports for precise figures.

Benchmark Comparison: JHSC's performance is typically compared against a broad small-cap equity index, such as the Russell 2000 Index, to assess its relative effectiveness. Its multifactor strategy aims to outperform such benchmarks over the long term, though short-term deviations are expected.

Expense Ratio: 0.29

Average Trading Volume

The ETF exhibits moderate average daily trading volume, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for JHSC is generally tight, reflecting good market depth and efficient trading mechanics.

Market Environment Factors

JHSC is influenced by overall economic growth, interest rate policies, inflation, and sector-specific trends affecting small-cap companies. Its factor-based strategy is designed to perform well across different market cycles by seeking exposure to historically rewarded factors.

Growth Trajectory

The ETF's growth trajectory is tied to the performance of the U.S. small-cap segment and the efficacy of its multifactor approach. Any changes to its strategy or holdings would be driven by quantitative model adjustments and the evolving market environment.

Competitive Edge

JHSC's primary competitive edge lies in its systematic multifactor investment strategy, which goes beyond simple market-cap weighting. By systematically targeting factors like value, momentum, and low volatility, it aims to capture premium returns and manage risk more effectively than passive index funds. This quantitative, disciplined approach helps to remove emotional biases and ensures consistent application of its investment philosophy, potentially leading to superior risk-adjusted performance over time.

Volatility

As a small-cap ETF, JHSC is expected to exhibit higher volatility compared to large-cap equity ETFs due to the inherent price sensitivity of smaller companies. Historical data shows periods of significant price fluctuations.

Market Risk

The primary risks associated with JHSC's underlying assets include market risk, which affects the overall equity market, and specific risks related to small-cap companies such as lower liquidity, higher financial risk, and greater susceptibility to economic downturns. Factor risk, where specific factors underperform for extended periods, is also a consideration.

Ideal Investor Profile

The ideal investor for JHSC is one seeking long-term capital growth and who understands and is comfortable with the higher volatility associated with small-cap equities. Investors should have a moderate to high risk tolerance and a belief in the effectiveness of multifactor investing.

Market Risk

JHSC is best suited for long-term investors who are looking to diversify their portfolios with small-cap exposure and who believe in a quantitative, factor-based approach to investing. It is less suitable for short-term traders or those with a very low risk tolerance.

The John Hancock Multifactor Small Cap ETF (JHSC) is a quantitatively managed ETF focused on U.S. small-cap equities. It employs a multifactor strategy targeting value, momentum, and low volatility to enhance long-term capital growth. While it faces a competitive landscape, its systematic approach offers a differentiated investment strategy. Investors should be prepared for the inherent volatility of small-cap stocks and have a long-term investment horizon.

Data Sources:

• John Hancock Investments Official Website
• Financial Data Aggregators (e.g., Morningstar, ETF.com)

Disclaimers:

This information is for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investors should consult with a financial advisor before making any investment decisions. Data is subject to change.