The rise of multifactor smart-beta ETFs was evident on Tuesday, with the launch of seven such funds and a new filing for even more. John Hancock leaped into the space with six new ETFs, while Goldman Sachs added another “ActiveBeta” fund to its lineup. Meanwhile, J.P. Morgan filed for two ETFs covering Europe.
Multifactor funds are popular with ETF providers right now, most notably with iShares launching its FactorSelect family with indexes from MSCI targeting the quality, value, momentum and small size factors. Meanwhile, State Street Global Advisors has the SPDR MSCI Quality Mix ETFs that target value, minimum volatility and quality, and other firms such as ETF Securities and Global X Funds have rolled out their own multifactor families.
In particular, traditionally active shops have been lured to the ETF space by the quasi-active nature of smart-beta ETFs, whereas before they had shunned the space as the domain of plain-vanilla index funds or fully transparent active funds.
John Hancock, which has been flirting with ETFs via various filings since 2009, launched its first funds today. The underlying index methodology, developed by Dimensional Fund Advisors, overweights holdings based on smaller size, higher relative profitability and lower relative price.
The funds cover different slices of the U.S. market; their tickers and expense ratios are as follows:
- John Hancock Multifactor Mid Cap ETF (JHMM), 0.45 percent
- John Hancock Multifactor Large Cap ETF (JHML), 0.35 percent
- John Hancock Multifactor Technology ETF (JHMT), 0.50 percent
- John Hancock Multifactor Healthcare ETF (JHMH), 0.50 percent
- John Hancock Multifactor Financials ETF (JHMF), 0.50 percent
- John Hancock Multifactor Consumer Discretionary ETF (JHMC), 0.50 percent
The four sector funds are a first for the multifactor concept, which has otherwise been focused on regions and countries.
Goldman Sachs has followed up last week’s launch of its U.S. large-cap ActiveBeta ETF with the rollout of its own multifactor emerging market ETF. The Goldman Sachs ActiveBeta Emerging Markets Equity ETF (GEM) relies on Goldman’s own in-house methodology, which targets the value, quality, momentum and low-volatility factors.
GEM comes with an expense ratio of 0.45 percent.
J.P. Morgan has filed for a duo of ETFs targeting Europe’s market. The funds will provide exposure to hedged and unhedged versions of the FTSE Developed Europe Diversified Factor Index. They include the JPMorgan Diversified Return Europe Equity ETF and the JPMorgan Diversified Return Europe Currency Hedged ETF.
Morgan’s “Diversified Return” ETF family already comprises three ETFs targeting the global, developed-market and emerging market spaces. The funds are based on FTSE’s multifactor index family that targets valuation, momentum and quality.
The filing did not include tickers or expense ratios, but it did indicate the funds will be listed on the NYSE Arca exchange.
Contact Heather Bell at [email protected].