John Hancock Exchange-Traded Fund Trust - John Hancock Mortgage Backed Securities ETF (JHMB)

ETF Overview: John Hancock Mortgage Backed Securities ETF (JHA)

Profile:

JHA seeks to track the performance of the MVIS US Mortgage Backed Securities ESG Excluded Index (MVIS MBSEX), primarily investing in agency mortgage-backed securities (MBS), including pass-through certificates and collateralized mortgage obligations.

Objective:

JHA aims to generate current income while preserving capital.

Issuer:

• John Hancock Investment Management
• Reputation: Founded in 1822, the company has a long and reputable history in the financial services industry.
• Reliability: John Hancock has a strong track record of managing fixed income ETFs, with several products consistently ranking among the top performers.
• Management: The ETF is managed by a team of experienced fixed income portfolio managers with expertise in MBS investing.

Market Share:

JHA holds a relatively small market share within the MBS ETF space, with approximately $33.49 million in assets under management.

Total Net Assets:

JHA currently has total net assets of $33.49 million.

Moat:

• ESG Focus: Excludes mortgage-backed securities linked to companies involved in controversial activities, potentially attracting ESG-conscious investors.
• Experienced Management: JHA benefits from John Hancock's expertise in managing fixed income assets.

Financial Performance:

• Historical Returns: Since its inception in February 2021, JHA has generated an annualized total return of 3.29%.
• Benchmark Comparison: JHA has slightly underperformed its benchmark (MVIS MBSEX) by a small margin over the past year.

Growth Trajectory:

The growth of the JHA will depend on various factors, including market demand for ESG-focused MBS ETFs and overall market conditions.

Liquidity:

• Average Trading Volume: JHA has an average daily trading volume of approximately 2,559 shares, indicating moderate liquidity.
• Bid-Ask Spread: The bid-ask spread is relatively tight, around $0.01, suggesting low transaction costs.

Market Dynamics:

JHA is affected by factors like:

• Interest rate changes: Rising interest rates can negatively impact MBS prices.
• Housing market performance: A strong housing market can lead to increased demand for mortgages and higher MBS prices.
• Prepayment risk: Early repayment of mortgages can lead to a decline in MBS value.

Competitors:

• iShares MBS ETF (MBB): Market share: 67.25%
• Vanguard Mortgage-Backed Securities ETF (VMBS): Market share: 13.77%
• SPDR Bloomberg Barclays Mortgage Backed Bond ETF (MBG): Market share: 11.49%

Expense Ratio:

JHA has an expense ratio of 0.15%, making it relatively inexpensive compared to its peers.

Investment Approach:

• Strategy: Passively track the MVIS MBSEX index, investing in agency mortgage-backed securities.
• Composition: Holds a diversified portfolio of agency MBS with varying maturities and interest rates.

Key Points:

• ESG-focused MBS ETF.
• Experienced management with a strong track record.
• Low expense ratio.
• Moderate liquidity.
• Affected by interest rate movements and housing market trends.

Risks:

• Interest Rate Risk: Rising interest rates can lead to decreased MBS prices and potential losses.
• Prepayment Risk: Early mortgage repayments can negatively impact the portfolio value.
• Market Risk: The ETF's performance is tied to the performance of the underlying MBS market, susceptible to broader market fluctuations.

Who Should Consider Investing:

JHA may be suitable for investors seeking:

• Current income generation.
• ESG-aligned fixed income investment.
• Exposure to the US agency mortgage-backed securities market.
• Passive investment approach with low costs.

Fundamental Rating based on AI:

Based on AI analysis considering factors mentioned above, the fundamental rating for JHA is 7.2. This score reflects John Hancock's strong reputation and management expertise, coupled with a focus on ESG exclusion, potentially appealing to a growing investor segment. However, the limited market share, relatively small asset size, and dependence on interest-rate-sensitive MBS market pose challenges for JHA's future growth.

Please note: This information is for general informational purposes only and should not be considered investment advice. Always conduct your own due diligence and consult with a qualified financial advisor before making any investment decisions.