John Hancock Multifactor Emerging Markets ETF (JHEM)

ETF John Hancock Multifactor Emerging Markets ETF (JHEM): Overview

Profile:

JHEM is an actively managed exchange-traded fund (ETF) that seeks to deliver long-term capital appreciation by investing in a diversified portfolio of emerging markets equities.

Objective:

The primary goal of JHEM is to outperform the MSCI Emerging Markets Index by employing a multi-factor investment strategy. This strategy focuses on identifying stocks with strong fundamentals and attractive valuations across various factors like value, momentum, quality, and size.

Issuer:

JHEM is issued by John Hancock Investment Management, a subsidiary of Manulife Financial Corporation. John Hancock boasts a strong reputation and a long history in the financial services industry, dating back to 1862. The firm manages over $2 trillion in assets across various investment products.

Market Share:

JHEM holds a market share of approximately 0.5% within the emerging markets equity ETF category.

Total Net Assets:

As of January 31, 2023, JHEM has total net assets of $1.2 billion.

Moat:

JHEM's competitive advantages include:

• Active management: The ETF leverages the expertise of John Hancock's experienced investment team to identify undervalued and high-growth potential stocks.
• Multi-factor approach: This strategy aims to diversify risk and outperform the market by focusing on multiple factors beyond just market capitalization.
• Low expense ratio: JHEM's expense ratio of 0.54% is lower than the average for actively managed emerging markets ETFs.

Financial Performance:

Since its inception in 2014, JHEM has delivered an annualized return of 10.3%, outperforming the MSCI Emerging Markets Index by 1.5% per year.

Benchmark Comparison:

JHEM outperformed the MSCI Emerging Markets Index in 5 out of the past 7 years, demonstrating its effectiveness in generating alpha.

Growth Trajectory:

Emerging markets are expected to experience continued economic growth in the coming years, potentially driving further growth for JHEM.

Liquidity:

JHEM has an average daily trading volume of approximately 50,000 shares, indicating good liquidity. The bid-ask spread is tight, averaging around 0.05%.

Market Dynamics:

JHEM's performance is influenced by various factors, including:

• Global economic growth: Strong economic growth in emerging markets can positively impact JHEM's performance.
• Interest rate fluctuations: Rising interest rates can negatively impact emerging market equities.
• Political and economic stability: Political and economic instability in emerging markets can increase volatility and negatively impact returns.

Competitors:

Key competitors include:

• iShares Core MSCI Emerging Markets ETF (IEMG) - Market share: 8.5%
• Vanguard FTSE Emerging Markets ETF (VWO) - Market share: 7.5%
• SPDR Portfolio Emerging Markets ETF (SPEM) - Market share: 4.5%

Expense Ratio:

JHEM's expense ratio is 0.54%, which is relatively low compared to other actively managed emerging markets ETFs.

Investment Approach and Strategy:

JHEM employs an active management approach and utilizes a multi-factor investment strategy.

Composition:

The ETF primarily invests in emerging markets equities across various sectors and countries. Top holdings include Alibaba Group Holding, Tencent Holdings, and Taiwan Semiconductor Manufacturing.

Key Points:

• Actively managed, multi-factor ETF seeking to outperform the MSCI Emerging Markets Index.
• Strong track record of outperformance since inception.
• Low expense ratio compared to peers.
• Good liquidity and tight bid-ask spread.

Risks:

• Market risk: Emerging markets are inherently riskier than developed markets due to political and economic instability.
• Currency risk: JHEM is exposed to currency risk as it invests in assets denominated in different currencies.
• Volatility: Emerging markets equities tend to be more volatile than developed markets equities.

Who Should Consider Investing:

JHEM is suitable for investors seeking:

• Exposure to emerging markets equities with the potential for higher returns.
• Active management and a multi-factor investment approach.
• A low-cost way to invest in emerging markets.

Fundamental Rating Based on AI:

Based on an AI-powered analysis considering financial health, market position, and future prospects, JHEM receives a rating of 7.5 out of 10. This rating reflects the ETF's strong track record, experienced management team, and attractive expense ratio. However, investors should be aware of the inherent risks associated with emerging markets investments.

Resources and Disclaimers:

This analysis utilizes data from John Hancock Investment Management, Morningstar, and ETF.com. Please note that this information is for educational purposes only and should not be considered financial advice.