Daily ETF Watch: Hancock Updates Filing

The latest filing from John Hancock Investments updates the prospectus information for the firm’s planned smart-beta ETF family with tickers and fees. The six “Multifactor” ETFs, based on indexes maintained by Dimensional Fund Advisors, will cover the large- and midcap spaces as well as four sectors—consumer discretionary, financials, health care and technology.

The six funds, their tickers and expense ratios are as follows:

• John Hancock Multifactor Large Cap ETF (JHML), 0.35 percent
• John Hancock Multifactor Mid Cap ETF (JHMM), 0.45 percent
• John Hancock Multifactor Consumer Discretionary ETF (JHMC), 0.50 percent
• John Hancock Multifactor Financials ETF (JHMF). 0.50 percent
• John Hancock Multifactor Healthcare ETF (JHMH), 0.50 percent
• John Hancock Multifactor Technology ETF (JHMT), 0.50 percent

The methodology weights stocks based on their size, relative price and profitability, with the weights of companies with smaller sizes, lower relative prices and higher profitability adjusted upward, and vice versa for companies with larger sizes, higher relative prices and lower profitability.

The DFA website asserts that stocks’ expected return differences are a product of size, relative price and profitability, so it’s not surprising that these three measures are a key part of the index methodology. Interestingly, there are relatively few sector-based smart-beta funds, so the ones in the John Hancock filing will be breaking new ground.

The filing did not mention when the funds will launch, but it did indicate that they would list on the NYSE Arca.

Contact Heather Bell at [email protected].