A strong management team and sound investment process underpin JHancock Multifactor Em Mkts ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy's sensible investment philosophy earns an Above Average Process Pillar rating.  Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

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Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. JHancock Multifactor Em Mkts ETF earns an Above Average Process Pillar rating. 

The primary contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. 

 This strategy, over time, has consistently held more undervalued companies, compared with peers in the Diversified Emerging Mkts Morningstar Category. But in terms of size exposure, it is similar to the average. Looking at additional factor exposure, this strategy has consistently favored low-quality stocks compared with Morningstar Category peers over the past few years. Such positions do not tend to provide much ballast for a portfolio. In the latest month, the strategy was also less exposed to the Quality factor compared with Morningstar Category peers. This strategy's portfolio also has had exposure to more stocks with high dividend or buyback yields over peers in these years. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks force them to cut their dividends. Compared with category peers, however, the strategy had less Yield factor exposure in the latest month. Given the low trading volume of holdings, this strategy has also tilted toward illiquid assets during these years. Less-liquid stocks might offer strong returns to compensate for their risks, but they can be harder and more expensive to trade in bear markets. In recent months, the strategy also had less Liquidity factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in basic materials by 2.8 percentage points in terms of assets compared with the category average, and its energy allocation is similar to the category. The sectors with low exposure compared to category peers are technology and consumer defensive, with technology underweighting the average portfolio by 3.7 percentage points of assets and consumer defensive similar to the average. The portfolio is composed of 913 holdings and is diversified among those holdings. In its most recent portfolio, 19.2% of the fund’s assets were concentrated in the top 10 fund holdings, as opposed to the category’s 25.3% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 10% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

Above Average

Process

JHancock Multifactor Em Mkts ETF's strong team drives the strategy's Above Average People Pillar rating. There are four managers listed on the fund: Andres Torres, Rita Chen, Casey Baum, Joseph Hohn. Together, they manage a total of five strategies, with a Silver asset-weighted average Morningstar Medalist Rating, indicating the potential to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

Manulife Financial Corp has revamped its wealth- and asset-management business off the long-term strength of its successful U.S. unit, meriting an Above Average Parent rating. 

One of Canada’s Big Three life insurance companies, Manulife operates primarily in Canada, the United States, and Asia, with the bulk of assets in the U.S. The firm united its investment and wealth-management groups into a single, global segment in 2017 and 2018 and showcased it as a high-potential business. Since then, the group has restructured to mix three regional heads—U.S. & Europe, Asia, and Canada—with three global leaders segmented by channel: Retail, Retirement, and Institutional.

Manulife has entrusted this initiative to key individuals from its U.S. outfit, John Hancock Investments. For instance, Andy Arnott recently shifted from focusing on the U.S. and European unit to head up the firm’s global retail efforts. Leadership hopes this structure will allow it to leverage successful initiatives in its distinct regional markets.

John Hancock’s manager research team has long prioritized best-in-class managers regardless of firm affiliation. While much of the firm’s fixed-income strategies are run by Manulife teams globally, external managers dominate the firm’s equity lineup in the U.S. In its home market of Canada, Manulife’s internal teams, which boast strengths and weaknesses, manage most of the firm’s offerings, though the firm also has a strategic partnership with investment stalwart Mawer.

Parent

John Hancock Multifactor Emerging Markets ETF

JHEM tracks a multi-factor weighted index of large- and mid-cap stocks from emerging markets.

Exchange traded fund investors looking for a way to enhance their investment portfolios should consider the compelling case for emerging markets. In the recent webcast, How to Approach Emerging Markets; Value, Growth and Diversification, Emily Roland, Co-Chief Investment Strategist, John Hancock Investment Management, argued that the emerging markets are expected to dominate the global economy [.

A Smart ETF Approach to Emerging Market Exposure

The developing economy growth story is too big to ignore. Yet, the space poses a heightened risk for investors and has been battered by Covid-19 over the past year and a half.

News for John Hancock Multifactor Emerging Markets ETF ETF (JHEM)