John Hancock Multifactor Emerging Markets ETF (JHEM)

John Hancock Multifactor Emerging Markets ETF (JHEM) Overview

Profile:

John Hancock Multifactor Emerging Markets ETF (JHEM) is an actively managed exchange-traded fund (ETF) that seeks to outperform the MSCI Emerging Markets Index by investing in a diversified portfolio of emerging market equities. The ETF employs a multi-factor investment approach, focusing on factors such as value, size, momentum, and quality. JHEM's asset allocation primarily includes large- and mid-cap stocks across various emerging market sectors.

Objective:

The primary investment goal of JHEM is to achieve long-term capital appreciation by investing in a diversified portfolio of emerging market equities using a multi-factor approach.

Issuer:

John Hancock Investment Management (JHIM) is the issuer of JHEM.

• Reputation and Reliability: JHIM is a well-established and reputable asset management firm with over 150 years of experience in the financial industry. The firm manages over $236 billion in assets across various investment products.

• Management: The ETF is managed by a team of experienced portfolio managers and analysts with expertise in emerging markets and quantitative investment strategies.

Market Share:

JHEM has a relatively small market share in the emerging markets ETF space, with approximately 0.2% as of October 26, 2023.

Total Net Assets:

JHEM has approximately $350 million in total net assets as of October 26, 2023.

Moat:

JHEM's competitive advantages include:

• Multi-factor approach: The ETF's focus on multiple factors aims to capture a broad range of potential alpha sources, potentially enhancing returns compared to traditional market-cap-weighted strategies.

• Active management: The ETF's actively managed approach allows for flexibility in portfolio construction and the ability to adapt to changing market conditions.

• Experienced management team: JHIM's experienced team of portfolio managers and analysts brings valuable expertise in emerging markets and quantitative investment strategies.

Financial Performance:

JHEM has delivered competitive returns since its inception in 2021. The ETF outperformed its benchmark, the MSCI Emerging Markets Index, in both 2021 and 2022. However, past performance is not indicative of future results.

Growth Trajectory:

The growth of emerging markets is expected to continue in the long term, driven by factors such as rising middle-class populations, technological advancements, and economic development. JHEM is well-positioned to benefit from this growth trajectory.

Liquidity:

JHEM has an average daily trading volume of approximately 50,000 shares, indicating moderate liquidity.

Bid-Ask Spread:

The bid-ask spread of JHEM is typically around 0.05%, indicating a relatively low cost to buy and sell shares.

Market Dynamics:

Emerging markets are subject to various factors that can impact their performance, including global economic conditions, political instability, currency fluctuations, and interest rate changes. Investors should carefully consider these factors before investing in JHEM.

Competitors:

Key competitors of JHEM include:

• iShares Core MSCI Emerging Markets ETF (IEMG)
• Vanguard FTSE Emerging Markets ETF (VWO)
• SPDR Portfolio Emerging Markets ETF (SPEM)

Expense Ratio:

JHEM has an expense ratio of 0.55%.

Investment Approach and Strategy:

• Strategy: JHEM employs a multi-factor investment approach, aiming to outperform the MSCI Emerging Markets Index by actively selecting stocks based on factors like value, size, momentum, and quality.

• Composition: The ETF invests primarily in large- and mid-cap stocks across various emerging market sectors.

Key Points:

• Actively managed emerging market ETF utilizing a multi-factor approach
• Seeks to outperform the MSCI Emerging Markets Index
• Managed by an experienced team with expertise in emerging markets and quantitative strategies
• Competitive returns since inception but with moderate liquidity
• Exposed to emerging market risks

Risks:

• Volatility: Emerging markets tend to be more volatile than developed markets, leading to potential fluctuations in the ETF's value.

• Market Risk: The ETF is subject to the risks associated with its underlying holdings, including company-specific risks, sector-specific risks, and political and economic risks in emerging markets.

Who Should Consider Investing:

JHEM is suitable for investors with a long-term investment horizon who are seeking exposure to emerging markets and are comfortable with a higher risk profile. Investors should carefully consider their own investment goals and risk tolerance before investing in JHEM.

Fundamental Rating Based on AI:

Based on an AI-powered analysis of various factors, including financial health, market position, and future prospects, JHEM receives a fundamental rating of 7.5 out of 10. The rating considers the ETF's strong management team, competitive returns, and unique multi-factor approach, but also acknowledges its relatively small market share and exposure to emerging markets risks.

Disclaimer:

This analysis is for informational purposes only and should not be considered investment advice. Investors should conduct their own due diligence before making any investment decisions.