John Hancock Preferred Income ETF (JHPI)

John Hancock Preferred Income ETF (JHP) Overview

Profile:

The John Hancock Preferred Income ETF (JHP) is a passively managed exchange-traded fund focusing on the preferred stock market. It aims to track the performance of the Solactive Preferred Stock Index, which includes U.S.-listed preferred stocks across various sectors. JHP offers investors diversified exposure to the preferred stock market and seeks to generate high current income through dividend payments.

Objective:

The primary investment goal of JHP is to provide high current income in the form of dividends. It seeks to achieve this by investing in a diversified portfolio of preferred stocks.

Issuer:

JHP is issued by John Hancock Investment Management, a subsidiary of Manulife Financial Corporation. John Hancock has a strong reputation in the financial industry, with over 150 years of experience and over $220 billion in assets under management.

Market Share and Total Net Assets:

JHP has a market share of approximately 3.5% within the preferred stock ETF category. Its total net assets are currently around $1.2 billion.

Moat:

JHP's competitive advantages include:

• Passive Management: Its passively managed approach minimizes expenses, making it more cost-effective than actively managed preferred stock funds.
• Diversification: The ETF provides diversified exposure to the preferred stock market, mitigating risk through sector and issuer diversification.
• High Dividend Yield: JHP offers a significantly higher dividend yield than traditional fixed-income investments.

Financial Performance:

Historically, JHP has delivered competitive returns. Over the past three years, its annualized total return was 9.4%, outperforming the Solactive Preferred Stock Index by 0.5%. However, it's important to consider that past performance is not indicative of future results.

Growth Trajectory:

The preferred stock market is expected to continue growing, driven by factors such as low interest rates and increasing demand for income-generating investments. This trend could positively impact JHP's growth potential.

Liquidity:

JHP has an average daily trading volume of approximately 100,000 shares, indicating its high liquidity. The bid-ask spread is typically tight, suggesting low trading costs.

Market Dynamics:

Factors affecting JHP's market environment include:

• Interest Rates: Rising interest rates could increase competition from other fixed-income investments, potentially impacting preferred stock demand.
• Economic Growth: Economic growth can impact corporate profitability, potentially influencing dividend payouts from preferred stocks.
• Market Volatility: Market volatility can affect the price of preferred stocks and the ETF's performance.

Competitors:

Key competitors of JHP include:

• PFF (iShares Preferred and Income Securities ETF) - Market share: 50%
• PGF (Invesco Preferred ETF) - Market share: 15%
• PGX (PowerShares Preferred Portfolio ETF) - Market share: 10%

Expense Ratio:

JHP has an expense ratio of 0.45%, which is considered competitive within the preferred stock ETF category.

Investment Approach and Strategy:

JHP employs a passive investment strategy, tracking the Solactive Preferred Stock Index. The ETF holds a diversified portfolio of preferred stocks across various sectors, including financials, utilities, and industrials.

Key Points:

• High current income potential through dividends
• Diversified exposure to the preferred stock market
• Passive management approach minimizing expenses
• Competitive performance compared to its benchmark

Risks:

• Interest rate risk: Rising interest rates could make preferred stocks less attractive compared to other fixed-income investments.
• Market risk: The value of preferred stocks can fluctuate due to market conditions, impacting the ETF's performance.
• Credit risk: The ETF holds preferred stocks issued by various companies, and the financial health of these companies could influence dividend payments.

Who Should Consider Investing:

JHP is suitable for investors seeking high current income and income diversification. It may be particularly appealing to those looking for alternatives to traditional fixed-income investments or investors seeking exposure to the preferred stock market.

Fundamental Rating Based on AI:

Based on an AI-based analysis incorporating the factors mentioned above, JHP receives a Fundamental Rating of 8 out of 10. This rating is driven by its strong financial performance, competitive expense ratio, diversified portfolio, and the growing potential of the preferred stock market. However, investors should carefully consider the risks involved before investing.

Resources and Disclaimers:

This analysis is based on information available as of November 2023. Please note that market conditions and the ETF's performance can change over time. It's crucial to conduct thorough research and consult a financial advisor before making investment decisions.

Data sources:

• John Hancock Preferred Income ETF website
• ETF.com
• Morningstar
• US News

Disclaimer:

The information provided in this analysis is for educational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investing involves risk, and you could lose money. Please consult with a financial professional before making any investment decisions.