If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the John Hancock Multifactor Small Cap ETF (JHSC), a passively managed exchange traded fund launched on November 8, 2017.
The fund is sponsored by John Hancock. It has amassed assets over $564.78 million, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
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 0.42%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.07%.
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 Industrials sector -- about 22.8% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Nextracker Inc Cl A (NXT) accounts for about 0.55% of total assets, followed by Commvault Systems Inc (CVLT) and Planet Fitness Inc Cl A (PLNT).
The top 10 holdings account for about 5.11% of total assets under management.
Performance and Risk
JHSC seeks to match the performance of the JOHN HANCOCK DIMENSIONAL SMALL CAP INDEX before fees and expenses. The John Hancock Dimensional Small Cap Index is designed to comprise a subset of securities in the U.S. Universe issued by companies whose market capitalizations are smaller than the 750th largest U.S. company but excluding the smallest 4% of U.S. companies at the time of reconstitution.
The ETF has lost about 0.41% so far this year and is up roughly 6.51% in the last one year (as of 08/12/2025). In the past 52-week period, it has traded between $32.47 and $43.65.
The ETF has a beta of 1.03 and standard deviation of 20.14% for the trailing three-year period. With about 465 holdings, it effectively diversifies company-specific risk.
Alternatives
John Hancock Multifactor Small 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, JHSC is a sufficient option for those seeking exposure to the Style Box - Small Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Small-Cap ETF (VB) and the iShares Core S&P Small-Cap ETF (IJR) track a similar index. While Vanguard Small-Cap ETF has $63.04 billion in assets, iShares Core S&P Small-Cap ETF has $80.38 billion. VB has an expense ratio of 0.05% and IJR charges 0.06%.
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 Small Cap ETF (JHSC): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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