John Hancock Multifactor Small Cap ETF (JHSC)

John Hancock Multifactor Small Cap ETF (JHSC): A Comprehensive Overview

Profile:

JHSC is an actively managed ETF aiming to outperform the Russell 2000 Index by utilizing a multifactor approach. It focuses on small-cap stocks with potential for value, momentum, quality, and low volatility.

Objective:

The primary goal is to achieve long-term capital appreciation through a diversified portfolio of small-cap stocks across various industries.

Issuer:

John Hancock Investment Management, a subsidiary of Manulife Financial Corporation, manages JHSC.

Reputation and Reliability:

John Hancock boasts a long and reputable history, established in 1862. It manages over $261 billion in assets and is known for its commitment to active management and strong track record.

Management:

The ETF is actively managed by a team of experienced professionals with expertise in quantitative and fundamental analysis.

Market Share:

JHSC holds a 0.7% market share within the small-cap value ETF category.

Total Net Assets:

As of November 2023, JHSC has approximately $2.44 billion in total net assets.

Moat:

JHSC's competitive advantage lies in its multifactor approach and active management style. This allows for a more diversified and potentially higher-performing portfolio compared to passively managed small-cap value ETFs.

Financial Performance:

JHSC has outperformed its benchmark Russell 2000 Index since its inception in 2016. Notably, it delivered a 12.01% return compared to the index's 8.04% return in the past year.

Growth Trajectory:

JHSC has experienced consistent growth in both assets under management and investor interest. This trend is likely to continue considering the growing demand for small-cap value ETFs.

Liquidity:

JHSC boasts a high average daily trading volume, indicating good liquidity. This allows investors to easily buy and sell shares without significant impact on the price.

Market Dynamics:

The ETF's market environment is influenced by various factors such as economic growth, interest rates, and investor sentiment towards small-cap stocks.

Competitors:

Key competitors in the small-cap value ETF space include:

• iShares Russell 2000 Value ETF (IWN) with 34.06% market share
• Vanguard Small-Cap Value ETF (VBR) with 22.15% market share
• Schwab Small-Cap Value ETF (SVAL) with 12.91% market share

Expense Ratio:

JHSC has an expense ratio of 0.49%, which is slightly higher than the average for small-cap value ETFs.

Investment Approach and Strategy:

JHSC employs a multifactor approach, selecting stocks based on their value, momentum, quality, and low volatility characteristics. This active management style allows for a more diversified portfolio and potential outperformance compared to passively managed small-cap value ETFs.

Key Points:

• Actively managed ETF aiming to outperform the Russell 2000 Index.
• Focus on small-cap stocks with value, momentum, quality, and low volatility characteristics.
• Strong track record and competitive expense ratio.
• Growing assets under management and investor interest.

Risks:

• Volatility: Small-cap stocks are inherently more volatile than large-cap stocks.
• Market Risk: The ETF's performance is directly tied to the performance of the underlying assets, which can be impacted by various market factors.
• Active Management Risk: The ETF's success depends on the ability of the management team to select and weight stocks effectively.

Who Should Consider Investing:

JHSC is suitable for investors seeking long-term capital appreciation from a diversified portfolio of small-cap stocks. It is ideal for investors with a higher risk tolerance and belief in the active management approach.

Fundamental Rating Based on AI:

After analyzing JHSC's financial health, market position, and future prospects, the AI-based rating system assigns a 7 out of 10. This score reflects the ETF's strong track record, competitive expense ratio, and growth potential. However, the active management style and inherent volatility of small-cap stocks warrant consideration.

Resources and Disclaimers:

Data for this analysis was gathered from John Hancock Investment Management's website, ETF.com, and Morningstar. This information is intended for educational purposes only and should not be considered investment advice. Investors should conduct their own research and due diligence before making any investment decisions.