If you’re interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the John Hancock Multifactor Large Cap ETF (JHML), a passively managed exchange traded fund launched on 09/28/2015.
The fund is sponsored by John Hancock. It has amassed assets over $851.47 million, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile 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
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 0.29%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.92%.
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 Information Technology sector–about 24.20% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 3.83% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN).
The top 10 holdings account for about 15.33% 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 has lost about -3.49% so far this year and is up roughly 3.96% in the last one year (as of 07/15/2020). In the past 52-week period, it has traded between $27.49 and $43.04.
The ETF has a beta of 1.05 and standard deviation of 22.56% for the trailing three-year period, making it a medium risk choice in the space. With about 788 holdings, it effectively diversifies company-specific risk.
Alternatives
John Hancock Multifactor Large 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, JHML is a reasonable option for those seeking exposure to the Style Box – Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core SP 500 ETF (IVV) and the SPDR SP 500 ETF (SPY) track a similar index. While iShares Core SP 500 ETF has $200.49 billion in assets, SPDR SP 500 ETF has $279.97 billion. 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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