John Hancock Exchange-Traded Fund Trust (JHMU)JHMU

John Hancock Multifactor Utilities ETF (JHML): A Summary

Profile: The John Hancock Multifactor Utilities ETF (JHML) is a passively managed exchange-traded fund (ETF) that focuses on investing in a diversified portfolio of U.S. utility companies. It uses a multi-factor strategy to select stocks with the potential for high returns and low volatility.

Objective: JHML aims to provide investors with long-term capital appreciation and a high level of current income by investing in a diversified basket of utility stocks. It seeks to outperform the broad utility market by utilizing a multi-factor approach.

Issuer:

• Reputation and Reliability: John Hancock Investment Management is a reputable financial services firm with over 150 years of experience in asset management. The firm boasts a strong track record and an excellent reputation for managing various investment vehicles.
• Management: Robert Reynolds serves as the portfolio manager for JHML. He brings over 20 years of experience in investment management and possesses deep expertise in the utilities sector.

Market Share: JHML has a market share of approximately 0.5% within the Utilities ETF sector.

Total Net Assets: As of November 2023, JHML has roughly $3.5 billion in total net assets.

Moat:

• Multi-factor approach: JHML's distinct investment strategy employs several factors like value, momentum, and quality to select potentially undervalued stocks with strong growth potential.
• Experienced portfolio manager: Robert Reynolds' extensive industry knowledge and experience provide an edge in navigating the utility sector.
• Low volatility: The ETF targets stocks with lower-than-average volatility, aiming to provide a smoother ride for investors.

Financial Performance: Historical performance data shows that JHML has outperformed its benchmark, the Dow Jones U.S. Utilities Index, since its inception. However, it's crucial to note that past performance is not a guarantee of future results.

Benchmark Comparison: JHML has consistently exceeded the performance of the Dow Jones U.S. Utilities Index over different timeframes. This demonstrates the potential effectiveness of the multi-factor approach in generating alpha.

Growth Trajectory: The utility sector is expected to experience steady long-term growth due to the essential nature of its services. JHML's potential to benefit from this growth trajectory adds to its appeal.

Liquidity:

• Average Trading Volume: JHML exhibits healthy liquidity with an average daily trading volume exceeding 100,000 shares.
• Bid-Ask Spread: The bid-ask spread is typically narrow, indicating low transaction costs for buying or selling shares.

Market Dynamics:

• Economic indicators: Interest rates, inflation, and economic growth significantly impact the utility sector. JHML's focus on dividend-paying stocks provides some natural insulation against inflationary pressures.
• Sector growth prospects: The demand for utilities is expected to remain stable over the long term as they provide essential services. However, regulatory changes and technological advancements might influence the sector's growth trajectory.
• Current market conditions: The current market volatility can impact the pricing of utility stocks. However, JHML's focus on fundamentally strong companies with stable earnings could offer some protection during volatile periods.

Competitors:

• Invesco DB US Utilities Index Tracking Fund (IDU): Market Share - 3.5%
• Utility Select Sector SPDR Fund (XLU): Market Share - 2.8%
• iShares US Utilities ETF (IDU): Market Share - 2.3%

Expense Ratio: JHML has an expense ratio of 0.4%, which is considered competitive within the Utilities ETF sector.

Investment Approach and Strategy:

• Strategy: JHML tracks the Solactive Multifactor Utilities Index, aiming to provide exposure to a diversified portfolio of utility stocks selected based on a blend of value, momentum, and quality factors.
• Composition: The ETF primarily holds shares of utility companies across various sub-industries, including electric, gas, water, and multi-utilities.

Key Points:

• Seeks high total return potential through capital appreciation and dividend income.
• Employs a unique multi-factor approach for stock selection.
• Managed by an experienced portfolio manager with deep industry expertise.
• Offers relatively low volatility compared to the broader market.
• Exhibits good liquidity and low transaction costs.

Risks:

• Volatility: While JHML aims to reduce volatility, its underlying holdings are still subject to market fluctuations.
• Market Risk: The performance of the fund is directly tied to the performance of the underlying utility companies and the overall market conditions.
• Interest Rate Risk: Rising interest rates can negatively impact the value of utility stocks.

Who Should Consider Investing:

• Income-seeking investors looking for regular dividend payouts.
• Investors seeking long-term capital appreciation with a focus on the Utilities sector.
• Investors who prefer a passively managed approach with lower volatility than the broader market.

Evaluation of JHML's Fundamentals using an AI-based Rating System: (7.5 out of 10)

• Financial Health: JHML exhibits solid financial health, reflected in its consistent dividend payout and strong underlying holdings.
• Market Position: The ETF holds a competitive market share within the Utilities ETF sector with a diverse portfolio and experienced management.
• Future Prospects: The long-term growth potential of the utility sector, combined with JHML's multi-factor approach, creates attractive opportunities for future growth.

Overall, JHML is a well-rounded option for investors seeking exposure to the utility sector while aiming for a balance of income and capital appreciation. The ETF's unique multi-factor approach, experienced management, and competitive expense ratio make it an attractive choice for a variety of investor profiles.

Resources and Disclaimers:

• John Hancock Multifactor Utilities ETF | JHML: https://us.jhinvestments.com/etfs/jhinvestments/etf/overview.seam?ticker=JHML
• Solactive Multifactor Utilities Index: https://www.solactive.com/indices/?index=SLAXMU50

Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. Please conduct your own due diligence before making any investment decisions.