Making its debut on 09/28/2015, smart beta exchange traded fund John Hancock Multifactor Large Cap ETF (JHML) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is sponsored by John Hancock. It has amassed assets over $882.95 million, making it one of the larger ETFs in the Style Box - Large Cap Blend. This particular fund, before fees and expenses, seeks to match the performance of the John Hancock Dimensional Large Cap Index.
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.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.29% for this ETF, which makes it on par with most peer products in the space.
JHML's 12-month trailing dividend yield is 1.22%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 23.10% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Industrials round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 3.88% of total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).
The top 10 holdings account for about 21.04% of total assets under management.
Performance and Risk
The ETF has lost about -4.94% and it's up approximately 7.15% so far this year and in the past one year (as of 04/29/2025), respectively. JHML has traded between $59.74 and $73.44 during this last 52-week period.
JHML has a beta of 0.99 and standard deviation of 17.59% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 786 holdings, it effectively diversifies company-specific risk.
Alternatives
John Hancock Multifactor Large Cap ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.
SPDR S&P 500 ETF (SPY) tracks S&P 500 Index and the Vanguard S&P 500 ETF (VOO) tracks S&P 500 Index. SPDR S&P 500 ETF has $576.86 billion in assets, Vanguard S&P 500 ETF has $582.12 billion. SPY has an expense ratio of 0.09% and VOO charges 0.03%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
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 Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports Vanguard S&P 500 ETF (VOO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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