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Hancock Expands ETF Lineup With Five New, Smart Beta Funds

March 30, 2016 2:57 pm
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Asset management giant John Hancock significantly expanded its lineup of exchange traded funds Tuesday with the introduction of five multifactor sector ETFs, nearly doubling the size of its ETF offerings to 11 from six.


As is the case with its first six ETFs, which debuted last year, Hancock's newest additions are sub-advised by Dimensional Fund Advisors and follow multi-factor indexes provided by that firm.


The new Hancock ETFs are the John Hancock Multifactor Consumer Staples ETF (NYSE: JHMS), John Hancock Multifactor Energy ETF (NYSE: JHME), John Hancock Multifactor Industrials ETF (NYSE: JHMI), John Hancock Multifactor Materials ETF (NYSE: JHMA) and the John Hancock Multifactor Utilities ETF (NYSE: JHMU).


Those ETFs join consumer discretionary, financial services, healthcare and technology offerings from Hancock that also adhere to the Dimensional multi-factor methodology. Like its predecessors, Hancock's newest sector ETFs charge 0.5 percent a year, or $50 per $10,000 invested.


Hancock's sector ETFs focus on several factors (such as lower price, higher profitability and smaller market values) that research has proven can facilitate higher returns, according to Hancock.

“Dimensional applies market-cap multipliers to emphasize stocks with the targeted size, value and profitability characteristics. For example, the firm sorts all stocks in the eligible universe (excluding REITs) by price/book within each sector and creates five buckets, each representing a fifth of the available market capitalization,” according to a recent Morningstar research piece.

"Dimensional started applying the concept of multifactor investing more than 30 years ago, and today the firm is one of the most respected managers in the industry. Dimensional's approach is rooted in decades of academic research into the factors that drive expected returns, along with a record of delivering results to investors,” said Hancock in a statement.


Of Boston-based Hancock's previously existing ETFs, the largest is the John Hancock Multifactor Large-Cap ETF (NYSE: JHML), which has over $21.1 million in assets under management.

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